Wendy’s Garners Breakfast Daypart Success Sorry Burger King and McDonald’s

 

How do chain restaurants make franchisees happy?  Simple drive top line sales and bottom-line profits at the individual store level. The restaurant business is not brain surgery.  It is all about serving customer one meal at a time, serving Hot Food Hot and Cold Food, Fast, Safely, and with Portability according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

When you are not a niche leader the best thing to do is follow success clues of others.  That is exactly what Wendy’s did with its recent launch of French Toast Sticks.  Burger King ‘owned’ the AM fast food French Toast Stick space.  They took their eye off the ball, took consumers for granted, and Wendy’s spotted the weaken marketing messaging at Burger King.  Wendy’s now anticipates average weekly breakfast sales to reach $2,700 by year's end.

Wendy’s CEO Todd Penegor, stated, on the recent Q3 call he expects breakfast, introduced in March 2020 as the pandemic hit, to continue to grow beyond its current $2,700 a week average sales level.

Penegor continued, “We launched French Toast Sticks, our first major menu innovation in the U.S., which drove a meaningful acceleration in the U.S. breakfast sales over the course of the quarter,” …“We have received an overwhelmingly positive reception from our customers, proving just how much growth is ahead of us at the breakfast daypart.”

In case you did not know, Wendy’s breakfast, was rolled out earlier this year to units in Canada, has possible innovation open in the area of breakfast beverages after the success of copycat product introduction success it found with Fresh Toast Sticks.  

During the all Penegor went on; “We are incredibly proud of the success of our French Toast Sticks launch,”…. “This sweet craveable morning treat has quickly become our No. 1 selling breakfast item. The launch helped us maintain our morning meal dollar share in the QSR burger category and drove a meaningful acceleration in U.S. breakfast sales over the course of the quarter with average weekly sales approaching $3000 as we exited Q3.”

Price matter and the price, value, service equilibrium for The French Toast Sticks and a $3 croissant promotion provided confidence that Wendy’s will able to reach the goal of $3,000 average weekly breakfast sales by year’s end, according to the team at Foodservice Solutions®.

Breakfast sales momentum increased in the third quarter beyond the $2,700 a week levels in the second quarter. “It really accelerated nicely in the back half of Q3,” Penegor added.

Marketing matters in the fresh fast-food space.  “We remain committed to our $16 million global investment in breakfast advertising this year just as we remain committed to fighting for our fair share of the QSR breakfast business,” Penegor said. That $16 Million is consumer relevant marketing messaging in the held held food for immediate consumption space according to Johnson.

Adding relevance for consumers was Wendy’s slow shift into technology. Digital sales momentum held at about 9.5% of sales domestically and 15% internationally, Penegor added.

“We expect these results to accelerate even further in the coming quarters as we launched our loyalty program in Canada just days ago,” he said, adding that delivery typically peaks in the fourth quarter. Rewards loyalty members increased about 10% in the quarter as well, he said.

“We are committed to expanding delivery and mobile order access and efficiency, fine-tuning our user experience and further developing our one-to-one marketing program to accelerate our digital business even further across the globe,” Penegor said.

It just may not be as rosy a picture as you might think as Gunther Plosch, Wendy’s chief financial officer, stated inflation eased slightly in the third quarter, falling to about 15% in the period from 19% in the second quarter. For the year, Plosch said, “We are guiding 15% to 16% on commodities and about 8% to 9% on labor.” Traffic was “slightly negative” in the third quarter and price increases were between 9% and 10%.

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

Dollar Tree’s Growth and Success Now Focused on Grocerant Food and Beverage

 

With 63.2 percent of all households now consisting of one or two people, Doller Tree’s focus on grocerant niche meals and meal components for them is unlocking the potential legacy grocery stores failed to address according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Doller Tree raised its financial outlook for the year, saying efforts to drive sales of consumables and focus on value are over keys to success moving forward.  A renewed focus on food and drink propelled Dollar Tree to a strong third quarter as consumers increasingly turn to extreme discounters amid soaring inflation, the retailer announced last week.

One again same-store sales across the business climbed, 6.5% for the period ended Oct. 29, reflecting an 8.6% increase at Dollar Tree and a 4.1% bump at the Family Dollar banner. The consumer top of mind discounter reported its operating income increased 22.8%, to $381.3 million, while margins improved 70 basis points to 5.5%.

So, for the nine months ended Oct. 30, Dollar Tree’s same-store sales rose 9.2%, largely driven by a double-digit increase in average ticket that was offset by a traffic slowdown.

The solid Q3 performance prompted Dollar Tree to boost its sales outlook for the year, with consolidated net sales for 2022 now expected to range from $28.14 billion to $28.28 billion, up from the previous range of $27.85 billion to $28.10 billion. Dollar Tree said it expects to report mid-single-digit same-store sales growth for the year, with Dollar Tree performing better than Family Dollar.

It was an emphasis on food and beverage sales drove Dollar Tree’s results during the quarter, CEO Mike Witynski said in a statement.

Witynski continued, “The efforts to evolve the assortment to drive consumables performance at Dollar Tree, combined with initiatives designed to improve the value proposition at Family Dollar, are working,”. “We believe we will continue to be part of the solution to millions of households seeking value at a time when they need us most.”

Here is more evidence many legacy grocery stores are missing out, earlier this month, West Coast discounter Grocery Outlet reported same-store sales growth of 15.4% during the third quarter, driven by inflation-pressed shoppers.

On a side note, this month marks one year since Dollar Tree raised most of its prices from $1 to $1.25 to boost its margins during a time of skyrocketing freight costs, supply chain disruptions and inflationary pressures.

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. 

Consumers do not want Inflation or Return to Office

 

The battle within foodservice sectors for customer during lunch and breakfast has never been more intense according to Steven Johnson Grocerant Guru at Tacoma, WA based Foodservice Solutions®. It’s at the intersection of urban markets, inflation, and the daily commute that food retailers are batting for every last consumer’s and a larger share of stomach.

That battle is between grocery stores, restaurants, c-stores, dollar stores, and virtual food outlets. It does not mean anything that there’s no official designation of a recession yet.  The simple fact is retail foodservice consumers increasingly feel like they’re in one, and are acting like we are in one.

Krishnakumar Davey, president of thought leadership for CPG and retail at Information Resources Inc. (IRI), stated, “Consumers are responding to rising prices by shopping promotions, prioritizing value options, and trading down to avoid going without,” … "Retailers must have the tools to quickly adjust to changes in consumer preferences to ensure they are offering the right assortment at price points that appeal to price-sensitive shoppers, as well as their most valuable customers.”

There is new analysis from NielsenIQ, that shows that U.S. consumers increasingly feel like they’re in one. Although consumers are finally finding relief at the gas pump, necessities like food are still forcing shoppers to make difficult spending decisions, fueling a growing sense of unease. 

So, NielsenIQ analysts refer to this as a “consumer recession” — when the core habits of traditional consumption have shifted, forcing shoppers to behave as though a recession is already here. They consume less, shift their spend to value retailers and brands, and buy more items on promotion. Of those NielsenIQ surveyed, 53 percent said they feel they are in a recession right now.

Nearly half of Americans (45 percent) feel like they cannot afford their previous lifestyle, according to a consumer sentiment survey on inflation commissioned by NCSolutions (NCS), which helps companies improve their advertising effectiveness. The online survey was fielded among 2,141 respondents in June. 

·         Additionally, 85 percent of respondents indicated they are very concerned or extremely concerned about inflation, and 93 percent said we’re in an inflationary time. One in four Americans believes a recession will occur in 2023.

·         76 percent say their family has changed how they buy food;

·         46 percent say they’re buying fewer non-essentials;

·         45 percent are seeking out less expensive brands;

·         43 percent are seeking out sales and promotions to afford their favorite brands; and

·         24 percent are shopping closer to home.

“For the second time in a little over two years, consumers are pivoting to new purchasing behaviors at the grocery store,” commented Alan Miles, CEO of New York-based NCS. “Since the start of the pandemic, they’ve been swapping their favorite brands for what’s available. Today, though, value is the centerpiece more often than availability; consumers are selecting brands and products to stretch their budgets as far as possible.”

Lori Stillman, vice president of research and education for convenience and fuel retailing association NACS, "While a recession may bring minimal temporary relief to the rising costs of labor in convenience, other costs such as utilities, insurance, maintenance and, especially, swipe fees will likely continue to remain elevated,” she said. “Price inflation in 2022 is different than what we have seen in the past. There are true supply issues causing prices to increase, not just increased demand for readily available products.”

According to Stillman, the conditions will require convenience store retailers to become more engaged with suppliers in pricing discussions, more discerning in terms of reviewing invoices, and more agile when it comes to enabling price changes. Retailers that are food focused will have to ramp up their menu costing and rationalization efforts to ensure their food programs remain profitable.

“With the expectation of decreased inside traffic, cost control will always separate top performers from the rest of the pack during a recession,” the NACS executive said. “On the other hand, growth-minded retailers should remain vigilant. The coming months will likely present opportunities for growth by acquisition of companies that aren't able to weather bumpy economic conditions, or feel the time is right to exit the industry.”  Are you looking a customer ahead?  How do you plan to get new customers or keep the old ones?

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Does your messaging look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.

I a Battle for a Greater Share of 

Stomach

Are you Winning? 

CPG Food Manufactures Does Amazon Know More about your Customers than You Do?

Insights help food retailers focus on what consumers want and what they think is relevant or important at a specific point in time. According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® understanding what is relevant to consumers today is more important than knowing what you sold them last year.

Does your marketing messaging look more like 2009, 2019, or today?  Are you looking a customer ahead?  Amazon is clearly looking a customer ahead.  So, recently during its annual unBoxed advertising conference, Amazon launched a bevy of new advertising solutions, one of which will have a direct impact on food retail.

Importantly something called, Digital Signage Ads. They are a product that allows brands to run digital advertisements in physical store signage, allowing customers to view or engage with a brand in a physical environment at the time of purchase. Simply put real time relevance at the point of purchase.

So, the Amazon Ads product works through Amazon DSP, the company’s demand-side platform that allows brands to programmatically buy ads to reach audiences on and off Amazon. This marks the first-time brands can programmatically advertise within Amazon’s physical stores.

Now CPG brands have the opportunity to optimize campaigns via an impression report and sales lift analysis for Amazon Fresh stores. According to Amazon, this will allow customers to see a wider variety of ads that are more relevant, which will translate into more brand discoveries and an enhanced customer experience.

According to a video demonstration of the service: “Brands can plan their campaigns based on position in the store, location, nearby product categories and daypart. With Amazon Ads, you can leverage a variety of flight dates, budgets and bidding strategies.”

In case you did not know, Amazon launched its Store Analytics service in June in an effort to provide brands with aggregated and anonymized insights about the performance of their products, promotions and ad campaigns at Amazon Go and Amazon Fresh stores in the U.S. with either Just Walk Out technology or Amazon Dash Carts.

The data that brands receive from Store Analytics will never include details such as shoppers’ names, individual browsing data, or individual session details like the time of day they shopped or the store at which they shopped. Additionally, no video or images of shoppers will be shared with brands as part of the service. Is your brand relevant and top-of-mind at the point of purchase?

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 

In a Battle for Share of Stomach

Real Time Customer Relevance

Matters

PepsiCo Grocerant Niche Mix and Match Help Drive Sales, Profits, Success

Regular readers of this blog know that PepPlace, was a one-month popup, launched in partnership with Famous Dave’s, had a beverage-first menu, with a mix and match food beverage customer first focus targeting insights from one of the hallmarks of the grocerant niche mix & match meal component bunding according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Now PepsiCo is sharing the insights it garnered for free on the off-premise business, drawing on lessons learned from its own delivery-only concept, Pep’s Place with any food retailer that want’s to drive top line sales and bottom-line profits.

Ready-2-Eat and Heat-N-Eat fresh prepared food has been driving top-line sales in every sector of retail foodservice for over 14 years according to the team at Foodservice Solutions®.  Now industry giants the ilk of PepsiCo are embracing not only the grocerant platform but assisting all food retailers with first hand insights.

The new insights are part of a new service within PepsiCo’s Foodservice Digital Lab, a consultancy created in 2019 to assist restaurants on all things digital as that side of the business became more prominent. 

Success does leave clues and now they are expanding their Digital Lab to include help with delivery-only formats like ghost kitchens and virtual brands.

André Moraes, senior director of marketing at PepsiCo Foodservice, stated, “Demand for those options continues to grow among restaurants, though they don’t always know the best place to start….“We’ve absolutely been hearing about ghost kitchens and virtual brands from many customers,” he said. “There’s demand for how to execute these properly.”

Now, PepsiCo can advise restaurants on things like starting their own virtual brand, bringing an outside brand into their kitchen or outsourcing their concept to other restaurants, Moraes said.

It will lend its considerable marketing expertise to the effort as well as guidance on technology and menu. It can also draw from its first-hand experience with Pep’s Place.

Moraes continued, “the project underscored the importance of discoverability and order flow for an online-only brand…“Understanding how guests will find you and how to make your brand and concept approachable to them is very important.”

This is important, PepsiCo will help restaurants with all of this, free of charge. Moraes went on to say, “What’s really important to us is that we’re being more than a beverage, snacks and food partner but being a go-to partner when it comes to opportunity like this.”  

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement 

United Airlines Service with Grocerant Niche Success

 

How is it that United Airlines understands that consumers want grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food and so many legacy grocery stores stutter at discussing the idea?  Restaurants have had great success selling grocerant niche meals and meal components for takeout and delivery.   According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, who stated, , “United will find success within the grocerant niche as well.” The carrier has opened a new convenience-store-like lounge in Denver for members of its elite flyers club.

Now, United Airlines is trying a grab-and-go version of the usually upscale lounges it operates in airports for members of its United Club elite-travelers program. The facility, just unveiled in Denver International Airport, sports banks of coolers and shelves packed with food items, not unlike a restaurant takeout or convenience store meals to go.

The lounge outlet features the same sort of technology that eliminated the need for cashiers at Amazon’s Go c-store experiment. Travelers gain entrance by having their boarding passes scanned at an entry gate. Once inside, they can select what they want and walk out. Yes, the underlying technology calculates their tabs and charges it to their credit cards.

So, the self-serve options include sandwiches, salads, wraps, yogurt, packaged beverages, fresh fruits and vegetable snacks. Coffees and coffee-based drinks are prepared at a full-service coffee bar where customers are still spared the need to pay then.

One drawback, only non-alcoholic beverages are offered. The emphasis is on speed and convenience, according to United.

Giving customers what they want, where they want it always works according to Johnson. This new format is intended to meet strong demand from flyers for food and beverages they can take onto their planes and consume in-flight. About 54% of visitors to a United Club say they like to have a snack or meal onboard.

Luc Bondar, President of United’s Mileage Plus frequent flyer program, stated, “We know there are times when our members are in a hurry and use our clubs to sneak a quick drink or snack, so we've created this new format to make it easy for them to do that without sacrificing an upscale club environment,".

In case you did not know, Access to what United calls United Club Fly is limited to the same travelers who have access to its airport lounges elsewhere. According to United’s website, that means either paying a $525 annual membership fee, buying a premium seat on an international flight or buying a one-day pass.

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

Sprouts Farmers Market Learning to Drove Profits with A Grocerant Niche Focus

 

The age-old question; What’s for Dinner, is at the intersection of saving time and inflation weights heavily on consumer minds today. At Sprouts they are just beginning to see how important that intersection can be to their top and bottom-line according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

The ‘halo of better for you produce and organic has extended itself to the service deli in most grocery stores; as not cooking from scratch, and not having to spend 40 minutes walking around the entire grocery store like a neanderthal looking for only four items to prepared a family meal.  Now I want to stop and ask yourself, what happened to A&P?

Does your grocery store still look an A&P?  Are you still building stores designed to force consumers to walk around the perimeter?  Does your grocery store still focus on basket SIZE over customer frequency?  If so, you just might be the next A&P, or like Kroger or Albertson looking for a new identity that consumers can find relevant.

The fact is Sprouts said recently that “produce sales are dropping while shoppers turn to more prepared foods and grab-and-go items”.  Now remember that Sprouts Farmers Market built its brand on the strength of its produce departments ‘halo of better for you.”  But deli ruled the grocer’s third quarter, with fruit and vegetables sales fading a bit, the company reported recently.

Sprouts CEO Jack Sinclair told analysts recently, “Even though we are competitively priced every day in produce, we believe our customer is managing their overall basket spend by eliminating the extra produce item,”.

Customers are instead swapping in deli items and prepared foods such as sandwiches, salads and snack boxes, company executives said.

Sinclair continued, “It’s a customer that’s taken us where we need to go in terms of meals and prepared meals,” ... “And we’re seeing a strength in that business and the team have done a nice job of developing some great products that fit in with our health and attribute-based assortment.”

So, for the quarter ended Oct. 2, Sprouts reported net sales growth of 5%, to $1.6 billion, compared to the same period a year ago. Same-store sales increased 2.4%. E-commerce sales grew 19% during the quarter and now make up 11.1% of Sprouts’ total sales.

Sinclair went on to say, “A few years ago, we set out to open 10% new stores every year,”…. “We’ve not delivered on that goal, given the permitting and supply chain challenges created by the pandemic.” The team at Foodservice Solutions® believes if they continue to evolve their Grocerant Niche Ready-2-Eat and Heat-N-Eat fresh prepared food platform they will be well on their way to incremental success.

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