McDonald’s Success Looking A Customer Ahead with CosMc’s

 

McDonald’s, the fast-food behemoth, has a rich history of investing in other restaurant chains.  In the late 1990’s, as regular readers of this blog know, McDonald’s bought Donato’s Pizza, Boston Market, and a stake in fledging Chipotle Mexican Grill. 

However less than a decade later, McDonald’s divested from all three chains, which had become distractions as McDonald’s struggled.  At least that was the company line. According to an article by Yahoo Finance, McDonald’s sold its stake in Chipotle, which represented approximately 82.2 percent of the voting interest and 0.8 percent of the economic interest in Chipotle prior to the exchange offer.

It was that same article that stated that McDonald’s CEO at the time, Steven Easterbrook, said that Chipotle was a distraction and that the company executive wanted everyone to put 100 percent io their efforts into the McDonald’s brand, so they sold the company’s shares.  

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® as it turned out the distraction was with McDonalds’s company executives not with any of the company’s operations or trajectory at the time.  McDonald’s success if in large part because it continues looking ‘a customer ahead’.  They understand their own customer and know what else they want in at their stores and that each of their consumers wants to ‘share in their stomach’.

Want to Build a 

Larger Share of Stomach?

Start Looking a Customer Ahead

 In an odd turn of events the once time high flying grocerant niche concept that was mismanaged was Boston Market. Both Chipotle and Donato’s Pizza continue to garner customer and drive top line sales and bottom-line profits with solid leadership.   Now let’s talk about McDonald’s eye for success.

In case you have not heard, CosMc's, is a McDonald's internal concept is a drive-thru-only concept, anchored by its beverage offerings, saw more than double the number of visits that a typical McDonald's location saw chainwide in the same month, according to a report from Placer.ai, which uses location data from mobile devices to estimate visits to specific locations. McDonald’s understand growing share of stomach according to Johnson.

So, when CosMc's, which opened on Dec. 7, 2023, generated triple the number of visits per square foot than an average McDonald's restaurant. The new format has a roughly 2,500-square-foot footprint vs. 4,000 to 4,500 square feet for the average McDonald's location, Placer.ai reported.

Now according to RJ Hottovy, head of analytical research at Placer.ai, the CosMc's location sometimes had to accommodate spillover traffic in a separate parking lot because the drive-thru lanes were often at full capacity, indicating the potential for more sales revenue. Let’s look a recent article so you get direct quotes:

"We saw quite a bit of demand. There were so many people in the drive-thru lane that if they had more capacity, the traffic numbers would have been a lot higher," he said.

The first CosMc's, which opened in Bolingbrook, Ill., is part of a limited test. McDonald's plans to open approximately 10 CosMc's pilot locations by the end of 2024, including across the Dallas-Fort Worth and San Antonio metro areas.

"I think this really is a test and learn concept, one to track younger audience and test menu innovations," Hottovy commented. "If nothing else, CosMc's is creating a tremendous amount of buzz and attracting new customers. It's just one location for now so doesn't look like it's cannibalizing McDonald's at this point but bringing in incremental visitors (the group that wasn't coming into McDonald's as much)."

The CosMc's menu is rooted in beverage exploration, with bold and unexpected flavor combinations, vibrant colors and functional boosts, according to McDonald's. It also features a lineup of food that includes a select few McDonald's favorites, as Convenience Store News  previously reported.

CosMc's offers a seamless digital and drive-thru experience, enabling customers to use dynamic menuboards and cashless payment devices during the ordering and payment process, with guided exploration and customization along the way. Drive-thru pickup windows are assigned once their orders are ready.

The format is named after CosMc, a little-known McDonald's character from the 1980s that the chain described as "part alien, part surfer, part robot," CNN reported..

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? 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.

Consumers Fuel Food Focused Meal Magic Trends

 

Today, the Team at Foodservice Solutions® has a coveted food focused leadership role in social media as well will well over 350,000+ followers on LinkedIn alone. While Technomic founder, Ron Paul, was a mentor to Foodservice Solutions® Grocerant Guru®, he was also the inspiration for much of what Johnson has accomplished making Foodservice Solutions®, the go-to source for food and foodservice industry insights and strategic advice on Grocerant niche Ready-2-Eat and Heat-N-Eat food.

In new research from the team at Foodservice Solutions found the following 10 trends are most likely to have the greatest impact within the foodservice category 2024:

1. Sustainable Plant Based Menu, Side Items including Deserts will Delight

The shift to healthy eating continues with breeze in like a warm wind in the summer. This year Convenience Stores, Dollar Stores, Service Deli’s, Coffee Drive-Thru’s, and Restaurants will introduce bold flavor, price favorable entrees and side items. Bold Flavors will the top driver for away-from-home purchases.

2. Mix & Match Meal Bundling Customization

Dollar stores will drive down entrée prices with a full range of mix & match affordable options slowing the growth at Fast Food outlets and C-stores. Price with the perceived drive but range of offerings and allow for more consumer customization.

3. Marketing Matters

Daypart dynamics will drive limited-time offers (LTOs) in every sector of retail foodservice as consumers seek to eat out once again.  In 2024 the foodservice competition (marketing messaging) will focus more on daypart than menu item.

4. McDonald’s Global Menu and Copy-Cats

McDonald’s proven global ethnic items such as egg rolls, empanadas and sushi are craveable and will be an example to all brands to expand flavors and rollout existing international successful menu items into the U.S. Adding global flavors to ubiquitous items is another way to add a taste of the world and increase variety. 

5. Branding the Impulse Menu Buy 

Prepared food purchases are frequently a planned purchase among 59% of shoppers, while 41% of shoppers said they buy prepared foods on impulse. Dinner has the highest amount of prepared food buys with 79% of respondents making purchases for that meal, while lunch comes in at 77% and breakfast at 62%.

6. Grocerant: Fresh Prepared

Once again Five Gallon buckets of 21-day shelf-life product won’t sell in the service deli. That kind of food just won’t fly in 2024, as consumers are looking for fresh food and bold flavors. Grocerant niche mix and match bunding of baked goods, fruit, veggies, salads, and dairy items will.

7. Pizza Bundling at C-stores

Delivery of fresh pizza for dinner will continue to drive C-store foodservice sales.  In 2024 the bundling of Milk, Eggs, Bread, Coffee and Ice Cream will be all it takes to garner customer from both the restaurant sector and the grocery store sector.  

8. Indulgent Snacking

Mini-meals driven by full flavored single item the ilk of pint of rich dairy free ice cream, ¾ pound of Pulled Pork, or single serve mac-n- cheese. For those buying dinner for one.

9. Technology 

45% of all restaurant meals are eaten at home. It’s technology via an app or online ordering and delivery that will continue to drive top line sale and bottom-line profits in 2024.

10. Dinner Diner Drama

The drama will unfold in 2024 when we see just who is cooking dinner. Cook from scratch or buy grocerant niche fresh prepared food. Dinner has the highest amount of prepared food buys with 79% of respondents making purchases for that meal, while lunch comes in at 77% and breakfast at 62%.

Interested in learning how Foodservice Solutions FIVE P’s of Food Marketing 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:  www.FoodserviceSolutions.us for more information.

Grocerant Guru® Restaurant Discontinuity Continues to Persist

 

At the intersection of What’s for Dinner, restaurant customer trial, cooking from scratch at home, and time is a new level of consumer discontent according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. What are some of the new stumbling blocks?

1.       Drive-thru’s are too SLOW.

2.       Don’t know how to cook ‘trendy’ flavored foods.

3.       Legacy Chain Restaurants Lack of Innovation

4.       You have to walk through five aisles to find three items in a grocery store.

There are few of our readers wondering; Why did the restaurant owner go to therapy? To get help with their “plate” addiction. Regular readers know that ‘Handheld Food for Immediate Consumption’ is now that mainstay in consumers life.

a.       Recent Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.8 % don’t know what’ s for dinner at 4PM.

b.       68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.

c.       Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.

d.       79.6% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 66.6% have two meal components per day.

e.       When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 91.3 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.4% chose meal components.

f.         Seventy-three percent of retail prepared food purchases are taken to go

g.       88.2 % of consumers prefer hand held food over sit-down meals with a knife and fork

Restaurant discontinuity continues disrupt branded chain restaurant templets.  Grocery stores that focus on Ready-2-Eat and Heat-N-Eat fresh food are garnering the attention of everyone. They are the ones garnering new consumers. So, let’s look as see just who they are:

There are many popular grocerants across the United States. According to a survey by Newsweek, Wegmans is the best grocery store in America, scoring 92.25 points overall . Other popular grocerants include:

1.       Central Market: A Texas-based grocerant that has been rated highly for customer satisfaction by Consumer Reports 

2.       Heinen’s: A Midwest-based grocerant that has been rated highly for customer satisfaction by Consumer Reports 

3.       Gelson’s Markets: A Southern California-based grocerant that has been rated highly for customer satisfaction by Consumer Reports 

4.       Market Basket: A Northeast-based grocerant that has been rated highly for customer satisfaction by Consumer Reports 

5.       Sprouts: A grocerant that has been rated highly for customer satisfaction by Newsweek 

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. 

Grocers Grocerant Advantage Technology Driven Marketing Tool Kit

 

Grocerant Niche Ready-2-Eat and Heat-N-Eat fresh prepared food fuels consumer refrigerators at a rate we have never before seen.  I know, regular readers of this blog know that Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, has endlessly pontificated with insights from Foodservice Solutions® proprietary Grocerant ScoreCards, along with countless supporting facts from industry leading food focused companies. 

What has evolved into a “battle for Share of Stomach” the grocery sector has developed a food focused marketing tool kit driven with technology that if integrated properly could sway consumers back to the grocery sector according to Johnson.   

Are You Building A 

Larger Share of Stomach?

All food retailers understand that freshness is an important attribute that is key to staying competitive in today's retail market — whether the competing retailers are restaurants, convenience stores, supermarkets or other non-traditional foodservice outlets. Below is a recent recap from the NRF 2024:

Today retailers implementing technology-based automation solutions can make a major difference, shared Pat Iannotti, director of retail operations at Price Chopper Supermarkets/Market 32, while onstage at NRF 2024: Retail's Big Show on Jan. 15, 2024 stated.

Price Chopper had its own forecasting module, but prior to partnering with cloud-based platform provider Invrafresh and rolling out its production planning tool, it always seemed to be behind the trends on what customers were looking for.

"We realized that when you're not keeping up with the trends, when you're not keeping up with the customers, it could lead to one of two things, either overproduction or underproduction," Iannotti said during the "Unveiling Automation's Wow Factor With Invafresh" session.

Iannotti added that overproduction leads to more markdowns, higher shrink and spending labor where it isn't necessary, while underproduction leads to out-of-stocks, disappointed customers, and lost sales and profits.

The biggest difference in the company's processes is that the production planning tool "takes the guesswork out of fresh item management," he said. "There's no more gut feel that our teammates have to use when deciding how much product to make and at what times of the day to make it. They use the system."

The tool isn't a one-and-done solution, as company management continually examines the data to make sure that the algorithm's production recommendations are accurate. Retailers should prepare to put effort into employee adoption.

"It's a constant battle to get your folks to embrace the technology and not use it as a mandate," Iannotti said. "We want to teach them so that they see the value in what they're doing and realize 'boy, this makes my life a lot easier if I use this product.'"

The rise of complex, data-based solutions is a major boon for fresh foodservice, according to Matt Schwartz, CEO and co-founder of Afresh Technologies, which seeks to help grocers make smarter decisions throughout their fresh supply chain.

"Fresh food is the strategic heart of the retail business, especially in grocery. It's really what drives people to choose where they shop," Schwartz said during the "Driving Optimal Decision-Making in Fresh Grocery" session. 

He pointed out that in the past, even "mission-critical functions" such as ordering, replenishment, production, merchandising and supply chain were processed manually or by using systems that were not designed with freshness in mind. This prevented retailers from doing their best in the category and had a negative effect on the core customer experience.

Offering fresh products doesn't have to mean charging high prices. John Clear, senior director at Alvarez & Marsal Consumer Retail Group, pointed out that leveraging improved processes and performance can drive efficiencies and allow retailers to target customers that may be traditionally underserved in fresh while still making money.

Another important factor is the halo effect that fresh has on the broader store. "Interestingly with my current client and my current engagement, we see a really clear correlation between transaction growth for the whole store and then sales performance and fresh," Clear said.

The key is that the customer who needs to buy fresh items comes back more regularly and adds additional items when they do.

A quality fresh offering also contributes to the overall perception of a store, he noted.

The biggest challenges to success with fresh include high expectations of people who may not have the proper training tools and an ongoing time crunch. The complexity that comes with a responsive, market-focused fresh offering can also add to shrink and difficulty in executing.

"If I look at retailers that are really successful in their businesses and driving that halo effect and fresh, they find ways to drive the experience of fresh in their stores," Clear said. "They're having more of an assortment allocated to fresh food. They're more dynamically adjusting what they offer."

That's where today's fresh-focused solutions can make a big difference, according to Clear. "I think the opportunity then goes back to the how can technology, if it's purpose built for these fresh categories, actually make that a scalable thing for a retailer to roll out," he noted. 

In case you did not know, NRF 2024: Retail's Big Show, the National Retail Federation's annual show, took place Jan. 13-16 at the Jacob K. Javits Convention Center in New York. Are you utilizing all the tools in your marketing tool too your best advantage?

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