In the continuing battle for share of
stomach the consumer continues to migrate with the food price, value, service equilibrium
according to Steven Johnson Grocerant
Guru® at Tacoma, WA based Foodservice
Solutions®.
The formula for the price, value, service equilibrium continues to
evolve success was: Price + Quality + Service + Portability = Value. That formula has evolved with Gen Z and Millennials
today. Foodservice Solutions® Grocerant Guru® has once again retooled, reevaluated, calculated then evolved the
formula and here is the new formula: Price + Quality + Social + Portability = Value.
Currently, price is top of mind
for most consumers. That said Consumer Price
Index for February indicated a narrowing of the gap between grocery and
restaurant prices, the Bureau of Labor
Statistics reported last week.
So, the index for food at home, mostly
groceries, rose 10.2% over the last 12 months, and the index for food away from
home, mostly restaurants, rose 8.4% over the past year. The index for
full-service meals rose 8% over the last 12 months, and the index for
limited-service meals rose 7.2% over the same period.
Mark Kalinowski of Kalinowski
Equity Research, stated, “With grocery prices continuing to rise at a
faster rate than restaurant prices, and with commodity-cost inflation remaining
a huge challenge – coupled with what has been so far fairly manageable consumer
resistance to menu price increases,” …“we expect that U.S. restaurants will
continue to raise menu prices at a meaningfully higher-than-historical-average
rate during the first half of 2023, if not for longer.”
Here is the good news for restaurants. The Consumer Price
Index data showed the gap between groceries and restaurants narrowed in
February from January, when food at home rose 11.3% and food-away from home was
up 8.2% in the past year.
Kalinowski added, “The 1.8
percentage-point difference between food-at-home’s 10.2% and
food-away-from-home’s 8.4% nevertheless remains one of the widest gaps in
40-plus years... “However, on a monthly basis, it is 370 basis points less than
the 5.5 percentage-point gap witnessed for July 2022 and August 2022. We expect
the gap to continue to narrow over the next six to 12 months, meaning that the
current advantage for restaurants is likely to dissipate in the not-so-distant
future.”
Ron Ruggles of NRN reported, “Noah Hayes,
general manager for the U.S. and Canada at Deliverect, a global
software-as-a-service company for online food-delivery management, said in a
statement:
“Inflation is dominating the conversation
in every industry and according to the Bureau of Labor Statistics, consumer
prices rose 6% for the year ending in February,” Hayes said. “With the food index
increasing 0.4% over the month and 9.5% year over year, consumers have felt the
impact.”
Consumers “undoubtedly” are increasing
their consciousness of spending, he said, adding that restaurants can automate
tasks and optimize menu pricing.
“While finding ways to boost profits and
reduce costs will be imperative for the bottom line, restaurants should
continue offering competitive wages to recruit and retain staff,” Hayes said.
“A happy team and operationally savvy kitchen is the winning recipe when it
comes to offering a high standard of service to customers.”
Consumers are time starved, looking for
meal solutions. They are looking for
grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals according to
the team at Foodservice Solutions®.
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
In a Battle For Share of Stomach
You Can WIN!
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