Tuesday, October 28, 2014

Restaurant Growth Slows While Technology Drives Food Growth


Befuddled by extremely modest year over year sales numbers, flat customer counts, declining year over year unit locations, the restaurant sector has capitulated fresh food sales growth to new start-up and technology companies. The National Restaurant Association’s research analyst Hudson Riehle points out that only 2 in 5 customer say that restaurants today are an important part of their lifestyle. Yes,  as Bob Dylan would say” times they are a changin.”

Does Your Restaurant Have Braggability?

The change may not be so fast.  Ever the optimist  Wally Doolin, chairman of TDn2K, parent of Black Box Intelligence, remarked to NRN online about the restaurant sector “Sales finished strong in the third quarter,…We’re off to a good start in the fourth quarter already.”  This by the way has been the industry mantra for the past 5 years. 

By the way a San Francisco-based food delivery startup called Munchery, recently raised $ 40 Million dollars. That’s $40 million dollars that might at one time have gone into building new Burger Kings, Subways, Denny’s or IHOP’s.

This is becoming a land grab for share of stomach without the cost of the land. Think about it. Americans spend $151 on food each week. With technology today consumers never have to leave home, or work and can eat with or without cooking, or doing the dishes. Does your restaurant have ‘braggability’? Without braggability why would anyone come to your restaurant?

The Grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food driven by consumers is changing the paradigm with not only how that service or product is consumed, but how it is provided as well. Without ‘braggability’ in our Omni-channel retail world the questions becomes: Why build a restaurant? Why hire, train, and maintain a staff when technology can edify the experience for less and do it faster? All while the technology companies are creating media buzz, consumer ‘braggability’ and driving top line growth.

Is your company a Dinosaur or Pioneer?

When Red Lobster opens a new restaurant in 2014 they do it very much the same way they did 46 years ago? Sure an up-dated menu, d├ęcor, and messaging but the business model has not been updated. Red Lobster and maybe your company’s business model might just look more like yesterday’s business model than tomorrow’s business model. What’s your business model? Does it incorporate the evolving consumer or optimism for yesterday’s business model returning?

Legacy hedge funds are buying into companies the ilk of Bennigans, Sbarro, and Taco Del Mar all are here first stabilizing a brand with intent to grow it once again. Are these companies the past, present, or future of Food Retail? Do they have ‘braggability’ or customer relevance?

Foodservice Solutions® Grocerant Guru™ believes that companies the ilk of Plated, Peachdish.com , Spoonrocket, Hello Fresh, and Munchery will not only survive they will thrive for they provide “authenticity in being local, personal, while providing fast service.”  Are you’re operating standards evolving?

A New Business Model Unfolding

There is a new retail food business model unfolding today that model is portable Ready-2-Eat and Heat-N-Eat fresh food.  This new model it is creating disequilibrium for restaurateurs and reorganization or bankruptcy for others. Consumer adoption of mobile and non-traditional retail food platforms has created discontinuity for Chevy’s Fresh Mex, BuffetsRound Table PizzaFuddruckers and Red Lobster to name but a few. Is it time to edify your brand with grocerant niche consumer valued attributes? Outside eye can drive top line sales and bottom line profits.

The food space is exciting it is dynamic not static. The food sector is a market that is huge and too large to be considered just one market place for sure. “The takeout and delivery market today is estimated to between $70-to-$100 billion today, and a small fraction of these orders happen online today even fewer on mobile devise. Can you sell more food than is on your menu?  Yes, you can.  Will you?

Hudson Riehle points out that only 2 in 5 customer say that restaurants today are an important part of their lifestyle.  That number has been down market ably in the last five years. Are you ready to change with consumers?


Are you trapped doing what you have always done and doing the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Contact:  Steve@FoodserviceSolutions.us or visit: www.FoodserviceSolutions.us for more information.

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