Is the Chain Restaurant Business Model Relevant?

What’s for Dinner is the age old question was once the foundation that fueled the growth of the restaurant industry. Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® has been tracking when consumers start planning dinner since 1991 and continues to find that at 4PM today 62.73% of consumer still do not know what’s for dinner.  However we know now that consumers are opting for options other than restaurants.

The simple fact is consumers have more options to select from and many do not include going out to eat at a restaurant.  Much of the desire not to dine out can be traced back to the 65 Inch HDTV Syndrome according to Johnson. Competition for the restaurant industry customer is coming from Drug Stores, Furniture Stores, Clothing Stores, Convenience Stores, and Grocery stores.

You know it a serious threat with 60,173 unit 7-Eleven is investing heavily in grocerant niche Ready-2-Eat and Heat-N-Eat fresh food. 7-Eleven is testing 15 new prepared food items that range from Italian to Asian and Mexican flavors.

7-Eleven meal offerings look a lot like the prepared meals that are selling fast in the frozen food court at your local grocery stores except they are fresh prepared. In fact they resemble the meals and meal components offered by Pret A Manger, fresh&co, Snap Kitchen.  In fact today 160 million consumers visit a convenience stores every day in the US and 76% of convenience store customers purchase foodservice items with a drink according to Coca Cola USA.

Recently the NPD Group found, about two-thirds of consumers buy premade meals at least once a week. And that’s up nearly 70% from the firm’s 2010 data, when one in five consumers purchased a prepared meal in a given week.

Food industry research icon Bonnie Riggs of the NPD Group stated “Consumers use QSRs, convenience, and grocery stores interchangeably for fast food, particularly when they find the same quality and variety,” “The lines between retail foodservice and QSRs are blurring for consumers, and these channels are competing for visits from consumers looking for a quick meal or snack.” 

Regular readers of this blog know that’s what our own Grocerant Guru® has been pontificating since 1991. One things that 7-Eleven does better than more other food retailer is leverage the size of the chain to drive chain restaurants nuts with a threating price point according to Johnson.  The new meals begin at $3.99-$4.99 and cover the spectrum of trendy flavors and dayparts

 Kelly Buckley, 7‑Eleven vice president of fresh food innovation stated “Younger demographic groups, in particular, are constantly snacking throughout the day versus eating three traditional meals.” Buckley, formerly from Applebee’s and Pizza Hut, represents another existential threat. As c-stores try to gobble up the prepared food market, they are pulling talented executives from the restaurant industry.

Albertsons, the 2,600- unit grocery chain, is acquiring meal kit company Plated. This deal will make Plated the first onmichannel meal kit with national scale. So at 4 PM when your customer is looking for dinner we ask Why will they continue to come to you?

Success does leave clues www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us