Grocery Stores Sales Maintain Momentum on Default as Restaurants Crumble

 

While conveniences stores and restaurants are doing their best to retain and recruit consumers, grocery stores have the benefit of all those consumers that have been working at home. According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who stated, “the comfort of the home office and empowered more and more consumers to explore cooking a meal at home and saving money every month from not buying gas and driving to work, buying coffee and breakfast on the way to work or by not going out to lunch.”.

In a new report from IRI and the NPD Group found that once again, “Food-at-home sales are surpassing those at restaurants. The pandemic, of course, sent most cubicle-dwellers to their home offices. The fact that many of those people are still working from home most of the time is apparently very good news for grocery stores.”  Thus, winning by default.

The report found, “Food-at-home sales are outpacing restaurant sales, a trend that is expected to continue to grow. …Food-at-home sales have grown 8.7% compared to a year ago, while food-away-from-home sales are up 6% compared to 2021, the groups said in their first-ever assessment of the nearly $1.5 trillion total food market.

Part of the reason for that growth is the way Americans are working today. Some 20 million U.S. workers have hybrid or flexible work schedules that allow them to do their jobs, at least some of the time, from home. That is keeping 62.5% of food dollars based on at-home sales, while 37.5% of food dollars are spent on restaurants and other foodservice, the report found.

In case you did not know, Albertsons CEO Vivek Sankaran told analysts last month that his company has noted the shift from people working at home, with the grocer’s prepared meals, sandwiches and grab-and-go salads performing well.

“Consumers are still eating a lot at home, right?” Sankaran said. “Our ready meals are doing so well, we just launched a sandwich program. And the sandwich program, which is homemade sandwiches, they’re doing so well. And our convenient salads in our stores are doing so well.”

David Portalatin, SVP and industry advisor for food and foodservice for NPD, stated, “Consumers are seeking out less-expensive food options from grocery stores rather than dining out at restaurants, … “Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home,”

This is a key point from the study,”Grocery prices have soared more than 13% over a year ago, while restaurant prices are up 7.6% over 2021. But a typical restaurant meal costs 3.4 times more than one from the grocery store.”

When shoppers hit the grocery store, they are increasingly hunting for low prices, the report said.

“Consumers are bargain hunting, preferring more mainstream and value brands over premium brands, choosing private-label foods in select categories and occasionally buying premium products as affordable luxuries,” the report noted.

There can be no doubt that as inflation hit every part of consumers daily life restaurants will face continued pressure keep prices low or risk capitulating year over year customer counts. Restaurant Year-over-year (YoY) same-store sales and traffic experienced the fifth consecutive month of negative growth. July’s sales growth was +0.6% — a slowdown of 1.3 percentage points compared to last month. Putting it into a longer historical perspective, this is the weakest growth posted by the industry since February 2021 — the last month in which the industry lapped over a pre-pandemic month.

Guest count growth rates face a similar and, frankly, more concerning circumstance. Same-store traffic experienced negative YoY growth for the five-month period ending in July 2022. Looking at traffic numbers from the first week of August, Black Box Intelligence expects the negative traffic growth trendline will continue its streak through the end of the month. Traffic growth was -5.1% in July — a decline of 0.4 percentage points compared to June’s growth rate. Like same-store sales, this was the softest traffic growth posted by the industry since February of last year.

The news for the restaurant sector gets even worse as new research says delinquencies across all small businesses are at an 18-month high because of deteriorating business conditions and landlords raising their fees.

“About 46% of restaurants lacked the funds to pay their August rents, an 8-point jump in delinquencies from two months earlier, according to the latest survey of small businesses by Alignable Research Center.

The research shows that rent became significantly more difficult for all types of small businesses to cover this month. The delinquency rate across all industries was 40%, the highest Alignable has clocked in 18 months. For July, the rate was 28%.

Restaurants had the highest delinquency among the service industries that were included in Alignable’s study. The report was based on a poll conducted between Aug. 13 and Aug. 23 of 7,331 randomly sampled small businesses.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Amazon Fresh and Tesco Battling Prices and Technology in the UK

 

In a battle for grocery and convenience food customers in the United Kingdom, the undercurrent of inflation, pricing, and technology are creating a competitive platform that many legacy retailers simply will not be able to compete according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Walmart was not able to figure out how to compete and stay competitive in the United Kingdom and after many years simply threw in the towel.  Will Amazon fare any better? Does Amazon have better insights than Walmart. The team at Foodservice Solutions® does not think so, albeit they have different insights that might be more relevant in today’s reality.  That said they still may not be all of the right insights.

We say that after reading several reports last week that Amazon has put it’s plans to expand it’s Amazon Fresh self-Checkout stores in the U.K. on hold. The same article also noted that Amazon Fresh is now set to match the prices to Tesco Clubcard deals.

They did that knowing that the deteriorating cost of living in the U.K. led by utility cost have refocused consumers on price like never before. Amazon Fresh stores had also not been meeting sales and profit expectations.

At the same time Tesco is planning replace a majority of ‘staffed tills’ at its large format stores with self-checkout in a way to reduce cost and keep prices stable. That announcement has riled up the Tesco base consumer so much that an online petition on change.org urging Tesco to stop the planned employee reduction had more than, 236,047 as of this post.

The rising cost of labor and benefits is running in to the undercurrent of inflation, pricing, and technology; all are creating a competitive conundrum for the consumer, the retailer, and market researchers according to Johnson.  Here is the question; is there equal technology from the farm to the table that can edify the growing process, supply chain, and the retailer? 

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

Chipotle Mexican Grill Interactive Participatory Marketing Works

 

Food marketing done right can drive top-line sales and bottom-line profits.  At Chipotle Mexican Grill sales success is gauged on how well they engage the consumer and how well the messaging is filled with relevance according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

If you want to try to understand how to develop a successful interactive participatory food marketing campaign simply look at Chipotle IQ, a trivia game that tests fans' knowledge of Chipotle's ingredients, leading food standards, fresh preparation, culinary techniques, sustainability efforts, and community engagement. This year's game will give Chipotle superfans the chance to win one of 500,000 BUY-ONE-GET-ONE (BOGO) offers.

So, each day this week at 9am PT, Chipotle will offer BOGOs to the first 100,000 fans who score a 10 out of 10 on Chipotle IQ. Fans with a perfect score will unlock an extra credit question, and if answered correctly, they will be entered to win one of 50 limited edition, stainless steel $500 Chipotle gift cards.

Ready to test your knowledge? Fans can visit www.chipotleiq.com .

This is important, Chipotle IQ features multiple choice, true or false questions, and write-in answers. Fans will have an unlimited number of tries to get a perfect score.

Chris Brandt, Chipotle, Chief Marketing Officer, stated, "Just in time for back to school, we're relaunching Chipotle IQ to recognize our true brand experts," … "The test has always generated incredible fan engagement, and we're excited to introduce an entirely new set of questions and an extra credit challenge for 2022."

In case you did not know, this is the third edition of Chipotle IQ. Chipotle first launched the trivia challenge in August of 2020 to massive fanfare. The 250,000 BOGO offers reserved for players who scored a perfect 10 out of 10 on the test were all awarded less than four hours after the game went live.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

National Restaurant Association Grocery Stores are Winning Dinner

 

Restaurant brand messaging that reflects marketing messaging and menus that sound and look more like yesterday than tomorrow are or will be in trouble soon according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Restaurants need to edify your brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  That’s right you need to reach out and invite consumers into you restaurant with a new message.  One with today’s relevance according to Johnson.

Here is why, grocery stores with foodservice operations – and those who want to track away-from-home dining trends – can heed the results of a new operator survey from the National Restaurant Association showing that macroeconomic conditions are taking a toll on that industry. According to the association's new research, nearly half – 46% – of restaurant operators say that business conditions are worse now than they were three months ago.

Restaurants Are Not Winning

In A Battle

For a Larger Share of Stomach

Consider that higher food, labor and operating costs are contributing to a slowdown and concern in the foodservice sector, the new NRA survey showed. An overwhelming majority of 88% respondents said their total food and beverages costs are higher than in 2019 and 85% report that their business is less profitable than it was before the pandemic.

In case you did not know, to stem some of the cost challenges, almost all (91%) of foodservice operators have increased their menu prices. More than two-thirds have changed the food and beverage items that are offered on their menu.

Once again, the focus in on labor shortages, while perhaps not as acute as last year, are still a stubborn problem. The survey found that 65% of operators don’t have enough employees to support demand and 84% said they will likely hire more workers over the next six months.

Michelle Korsmo, president and CEO of the National Restaurant Association, stated, "Consumers are watching prices rise faster in grocery stores than they are in restaurants and see an increased value in spending their food dollars in restaurants. However, the moderate menu price increases aren't balancing the surging input costs and this is forcing operators to cut hours, change their menus, postpone expansions, and reduce third-party delivery,".

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

Meijer Targets Restaurants Dinner Out with Affordable Takeout Meals

 

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals continue to drive top-line sales and bottom-line profits in ever sector of retail foodservice according Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In the heart of the U.S. Meijer operates 262 supercenters and grocery stores across Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin and dinner is going to cost less, and take less time to prepared according to Johnson for many Americans.

Meijer’s new Crafted Market lines offer restaurant-style meals in 5 minutes or less at home, for customers seeking convenience.  Looking a customer ahead Meijer want to cater to customers in need of speed and convenience, Meijer on Wednesday debuted its new line of restaurant-style, single-serve Crafted Market Heat-N-Eat Meals.

Consumers will be able to find the new selection in the deli section of all Meijer stores, Crafted Market meals are quick options, ready to eat in under five minutes at home. That is faster than the service you get when you go out to eat.

Marlys Roberts, Meijer merchandising director of deli and bakery, stated, "We have a long history of centering convenience and quality in our deli experience for our customers, so expanding our ready-to-heat options just makes sense,".

Consumers like food for immediate consumption and customers seeking a meal solution when they don't feel like cooking can now find 12 varieties of meals in the deli grab-and-go section of their local Meijer. A spokesperson for Meijer stated, “Forty percent of its Crafted Market meals are expected to be consumed the same day they're purchased.”

So, the new ready-to-heat options come in two lines – Crafted Market by Meijer and Crafted Market Signature by Meijer. The Crafted Market line offers classic, family favorites like blackened chicken mac & cheese, teriyaki chicken, and meatloaf and mash, Meijer said. The signature line offers a more-elevated meal option, which is assembled in-store, such as chicken enchiladas, pesto-grilled chicken with lemon- thyme orzo, and chicken asada.

Salwan Yaqo, Meijer deli buyer, stated, "We know that sometimes doing your grocery shopping can work up an appetite, so we're pleased to be enhancing our heat-and-eat selection with this line full of fun flavors and classic favorites that customers can grab as they finish up their trip and enjoy soon after from the comfort of their homes,".

Called Crafted Market by Meijer, are single-serve meals are targeted at customers who seek a quick, post-shopping-trip dinner solution or want a convenient meal on-hand for later in the week when they don’t want to cook while saving both time and money for each meal. Restaurants how much does your meal cost and how long does it take to get served?

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Are you Ready to Build A

Larger Share os Stomach ?

Virtual Restaurant Brand Managers find Success in Sweepstakes

 

Virtual branded restaurants have become a platform for food brand managers to excel according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. One virtual concept Smack Wings recently launched a monthly $500 Sweepstakes contest.  The team at Foodservice Solutions® believes it will pick up steam and drive top-line sales and bottom-line profits for the growing brand.

The owner of Tijuana Flats, announced   recently that its sister brand, Smack Wings, a delivery-only virtual brand, has launched a $500-per-month sweepstakes for guests who order and leave a review on Uber Eats or DoorDash.

Here is how it works, from August 2022 - April 2023, one winner will be selected and notified at the end of each month, for a total of nine winners. Each winner will receive a $500 Visa gift card. Guests must be 18 years or older to enter.

How guests can enter the sweepstakes:

o    Order Smack Wings from Uber Eats or DoorDash

o    Leave a review on Uber Eats or DoorDash

o    Complete and submit an entry form on https://www.smackwings.com/sweepstakes

Tijuana Flats Executive Chef, Joel Reynders, stated, “Our Smack Wings virtual brand is all about delivering bold flavor to our guests,” … “With the chance to win $500 every month, our guests are in for an even more exciting experience every time they order Smack Wings. We do everything we can to deliver craveable flavors to our guests with each and every bite, and our hope is that these sweepstakes will help us expand the excitement to even more guests.”

In case you did not know, Smack Wings menu features flavor-packed, jumbo-sized wings tossed in deliciously bold sauces and rubs like Chipotle BBQ, and traditional Buffalo which are inspired by Tijuana Flats’ popular line of Smack Sauces. Guests can pack on the flavor-fest with extras like Garlic Parmesan Pretzel Bites, Tater Totchos (tater tot nachos), and Donut Bites.

Smack Wings is available exclusively for delivery. With no physical locations for in-restaurant dining, Smack Wings guests must order food and leave reviews directly through Uber Eats and Door Dash platforms for the sweepstakes.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Walmart Where Dinner and a Movie are a Perfect Fit

 

Dinner and a Movie have become an American staple in millions of homes.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® Walmart is evolving its subscription plan to offer Paramount+ to its service for no extra charge.  That is a very good strategic fit, according to Johnson.

Soon, Walmart+ shoppers can tune in to “Star Trek: Strange New Worlds” while putting away their groceries. That’s because Walmart is adding a Paramount+ Essential Plan subscription at no extra cost for Walmart+ members. The subscription service will remain at $98 a year, or $12.95 a month, and include the Paramount+ Essential Plan subscription with an added $59 value.

Here is you will like this, the streaming component, which begins in September, includes recent blockbuster films such as “Sonic the Hedgehog 2,” live sports and the perennially popular preschool franchise “PAW Patrol.” And if looking into the future with Paramount’s original drama “Strange New Worlds” doesn’t strike their fancy, Walmart+ members can visit the past in the “Yellowstone” prequel series “1883.”

Chris Cracchiolo, senior vice president and general manager of Walmart+, stated, “We know Walmart+ is providing members real value in their every day — from grocery shopping to filling up their tank and more,”. “With the addition of Paramount+, we are demonstrating our unique ability to help members save even more and live better by delivering entertainment for less, too. Eighty-five percent of U.S. households use streaming services, and Paramount+ has the premium content and broad appeal that our members are looking for — like Walmart, they have something for everyone. We’re excited about the launch and what comes next for Walmart+.”

In a Battle for Share of Stomach

Are You Focused on the Customer? 

In case you did not know, Walmart+ offers members unlimited, free same-day grocery delivery from stores ($35 order minimum), free shipping (no order minimum) and an array of shopping tools such as Scan & Go contactless checkout (via the Walmart app) for $98 per year, or $12.95 a month. Other benefits include prescription drug savings, member-exclusive pricing and deals, and early access to promotions like Black Friday and new product releases.

Yes, there is more, in addition, Walmart+ members are eligible for six months of the Spotify Premium music streaming service at no cost. Walmart+ members can also add unlimited, no-fee and tip-free InHome delivery for another $7 per month or $40 per year, Walmart said. Walmart has also boosted the Walmart+ fuel benefits.

Jeff Shultz, chief strategy officer and chief business development officer for Paramount Streaming, stated,  “Paramount has enjoyed a close relationship with Walmart for years, and Walmart customers connect with Paramount’s beloved brands, content and characters every day through a range of consumer products available throughout Walmart stores,” …“Now, pairing Walmart’s expansive reach across the country with Paramount+’s broad and popular content that offers something for everyone is a unique opportunity to expand our partnership. Together we will bring Walmart+ members the full breadth of Paramount+ programming.”

The team at Foodservice Solutions® does not think that the Paramount+ tie-in might be Walmart’s way of competing against Amazon Prime Video. Rather they think that Walmart has insights into tier consumers and understand video is more important today than ever to consumers.

Here is a bit of a cost comparison, an Amazon Prime membership costs $15 a month, or $139 annually, and includes various perks such as free delivery (two-day, one-day and same-day delivery options), streaming, shopping and reading benefits. Prime members in 4,000 U.S. cities can sign up for a year of free Grubhub+. Members can buy groceries from Whole Foods, listen to audiobooks with Audible, subscribe to Kindle Unlimited, watch Amazon Video and use Amazon Echo speakers. Members can share their benefits with one other adult for free, and up to 10 members of a family can share benefits like shipping, video and photos through Amazon Household.

For international corporate presentations, regional chain presentations, educational forums, or keynotes contact: Steven Johnson 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. For more information visit GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869