Monday, March 17, 2014

Restaurant Sector’s Achilles Heel Channel Blurring

Restaurant sales continue tracking down or flat, restaurant customers are not eating any less.  Restaurant customers are simply eating somewhere else. Year over year customer counts continue to be slipping at a majority of legacy chain restaurants, particularly restaurant chains practicing brand protectionism. Many of the same companies have a business model more akin to yesterday than tomorrow. Are your year over year customer counts down?  Is your business model more akin to yesterday than too tomorrow?
Channel blurring only exist in the minds-eye of Neanderthal marketing managers.  Channel blurring does not occur in the minds-eye of the consumer.  Specifically 90 million of the most sought after customers between the ages of 18 to 30 called Millennials.  To Millennials food and eating occasion have become more about discovery, interaction, and small meals.  To the Millennials it is about share of stomach not retail sector, or retail channel. They do not care if they get a meal occasion at Food Court, Food Truck, Food Festival, sit down restaurant, stand up-restaurant. 
In a new study King Retail Solutions  commissioned  on how to better understand shoppers’ habits and attitudes when it comes to retail category blurring found: .

1.       Fifty-seven percent of Millennial shoppers purchase some of their groceries at a convenience store. 7-Eleven, Kwik Trip, Wawa and Circle K stores are among the top 20 places consumers look to buy groceries when they aren’t going to a traditional grocery store. 
2.       Twenty-eight percent of people will pick up a fresh meal at a c-store, but women are less likely than men to do so. These statistics are loaded with possibility.
3.       With 74 percent of shoppers willing to purchase a service from a non-service provider (think getting a haircut at a RaceTrac store);
4.        88 percent of shoppers willing to purchase a fresh meal from a non-restaurant (a salmon spring roll from a C-store;
5.       96 percent of shoppers willing to purchase groceries from a non-grocery store (milk and eggs from 7-Eleven), shoppers appear open-minded to expanding their horizons.
Today, Pinkies Liquor stores sell fresh prepared meals.  Pinkies have no table’s in-side or out-side.  After adding full kitchens sales in every department within the store are up double digit with incremental sales of fresh prepared food driving top line sales and bottom line profits in the 20% range.
Regional convenience store Wawa sells over 195 Million cups of coffee ever year. Yes, Wawa is a breakfast destination.  Convenience store Casey’s General Stores with over 1735 stores is winning in the dinner time slot with fresh pizza and pizza deliver.  With fresh food sales up 11.2% last year and overall sales up 7.3%.  
Do you know who will be your competitor next year? Your customers are not eating less they are simply eating somewhere else.  The grocerant niche filled with fresh prepared food is evolving faster than many legacy chain restaurants. Consumers are dynamic not static.  Restaurant brand protectionism is dead.  You could be risking everything by sticking with what you’ve always done.

For international corporate presentations, educational forums, or keynotes contact:  Grocerant Guru at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all.

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