The grocery store shopper is not eating less. The grocery store shoppers are buying food and eating food from other outlets including Convenience stores, Meal-Kit delivery companies and of other non-traditional fresh food retailers according to Foodservice Solutions® Grocerant Guru™ Steven Johnson.
The problem for legacy grocery stores is what do they do with the ‘miles of aisles’ consumer never wanted to walk and aren’t walking now? They are experiencing the same thing that Safeway experienced footprint malaise.
The quagmire is of their own making. Now the questions is how to downsize legacy units without capitulating market share while building out smaller consumer relevant retail locations. It’s not easy but here is a glimpse what some are doing and what we suggest.
1. Asda /Walmart offers a drive-thru so you can pick you preplaced order. Tesco has been turning over space to food outlets such as Harris + Hoole, which it half owns, and Euphorium Bakeries.
2. Tesco has added to gyms and soft play centers.
3. Tesco has even let surplus car park space to vehicle hire firm Avis
4. Asda/Walmart is testing "rapid scan" till that can scan groceries three times as fast as any human.
5. Asda/Walmart is cashing in on Britain's growing love affair with click-and-collect shopping by putting collection points in its stores as well as in petrol stations and installing unmanned secure lockers near office blocks where commuters can collect their groceries on the way home.
While all those actions are keeping legacy grocery stores busy. The customer is in search of new discovery and those actions simply won’t work magic. Hello Fresh, Plated and Blue Apron are filling a gap, Munchery, Wawa, Sheetz, and Rutter’s are all filling the gap.
In fact the Institute of Grocery Distribution, an industry thinktank, predicts “that £3bn less will be rung up in big stores in British grocery stores (over 25,000 sq ft) in five years' time”. That 3 billion others are all after. The same report suggest that “discounters – Aldi, Lidl and Poundland – will almost double in size to account for £1 out of every £9 spent on British groceries.” The same will happen in the U.S. market.
The reality is there is a new retail paradigm that all retailers are facing and consumers are migrating at record pace. The retail model of the past 35 years is fading. Today consumer relevant business models all have a heavy mix of Ready-2-Eat and Heat-N-Eat fresh prepared food.
Legacy retailers must realize that these new models are not about customer cannibalization for many it may be about retail survival.
Foodservice Solutions® specializes the Ready-2-Eat and Heat-N-Eat Fresh Prepared Food niche aka the Grocerant niche. www.FoodserviceSolutions.us We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy