Saturday, March 2, 2024

Dollar General is Selling a Lot of Food

 


When you open your 20,000th store you are executing relevant brand messaging and at Dollar General were talking more and more about a lot of food according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Steve Deckard, Dollar General’s executive vice president of store operations and development, stated, “Today marks an incredible milestone in Dollar General’s history,” said. “From our first general store to today’s 20,000th store opening, our mission to serve others and help customers stretch their budget remains strong. We believe each store provides a positive impact in our hometowns through convenient access to affordable essentials, career growth opportunities for employees, and the ability for local nonprofits, schools, and libraries to advance through Dollar General Literacy Foundation grants.

“On behalf of the DG leadership team, I would like to share my gratitude to the entire DG family for its ongoing commitment to our customers and communities in helping us reach this milestone.”

 


The milestone grand opening began at 9 a.m., and after the celebratory ribbon cutting shoppers received a complimentary tote bag filled with product samples from vendors and were served refreshments from Dollar General private brand Clover Valley.

Dollar General also awarded $20,000 to support educational and tutoring programs with a $10,000 donation each to Alicia Salinas Public Library and to the Boys & Girls Club of Alice.


Dollar General, is one of the dominant players in the dollar store market, has experienced significant growth. Let’s delve into the role of food in this expansion:

1.       Sales Composition:

o    In 2018, food, beverages, and other household consumable goods constituted 78% of Dollar General’s sales1.

o    The retailer’s focus on food items has contributed to its financial success.

2.       Target Communities:

o    Dollar stores, including Dollar General, strategically target communities with limited grocery options. These typically include:

§  Low-income neighborhoods

§  Rural areas

§  Communities of color


o    Dollar General’s approach is to saturate these areas with stores, often placing them within a five-minute drive of residents1.

3.       SNAP Sales:

o    Since the 2008 recession, Supplemental Nutrition Assistance Program (SNAP) sales have been a core component of dollar stores’ expansion strategy.

o    Dollar General’s customers primarily reside in households earning less than $49,900, with a significant focus on those reliant on government assistance1.

4.       Fresh and Frozen Food Business:

o    Dollar General’s sales soared to $33.7 billion in 2023, a 16% increase from the previous year.

o    Its net income rose significantly, partially fueled by its fresh and frozen food business23.


5.       Health Disparities:

o    Dollar stores’ prevalence in low-income neighborhoods and communities of color may exacerbate existing diet-related health disparities.

o    Individuals with better access to supermarkets tend to have healthier diets and lower obesity rates1.

The fact is, Dollar General’s strategic focus on food, especially in underserved areas, has played a pivotal role in its remarkable growth.

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 participationdifferentiation 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




Friday, March 1, 2024

Can Darden Restaurants Missteps of the past Help Light the Path Forward

 


Time and time again we all stumble.  Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® believes that good companies are simply better at recovering from those stumbles.  Let’s take a look at Darden Restaurants, the parent company of Olive Garden and other popular restaurant chains, has faced its share of challenges and missteps over the years. Here are some notable moments that stand out and future success they may take:

1.       Ignoring Activist Hedge Funds: In 2014, activist hedge funds like Barington Capital and Starboard Value pushed for changes at Darden. Barington called for the spin-off of the struggling Red Lobster and Olive Garden chains, while Starboard Value bought a stake in the company and proposed its own ideas for turning Darden around1.

2.       Red Lobster Spin-Off: Under pressure from activist investors, Darden agreed to spin off Red Lobster. However, this decision upset Starboard Value, which felt it wasn’t consulted and could result in significant losses for shareholders1.



3.       Red Lobster Sale: Darden went ahead and sold Red Lobster for $2.1 billion, a move that Starboard and Barington criticized as a “fire sale.” This decision turned out to be a big mistake, leading to further tensions between Darden and its shareholders1.

4.       Earnings Decline: Shortly after the Red Lobster sale, Darden’s earnings fell by one-third, adding to the company’s challenges1.

5.       COVID-19 Impact: The pandemic had a significant impact on Darden’s sales. While takeout sales rose, overall comparable-store sales declined, affecting brands like Olive Garden and LongHorn Steakhouse2.


Success Does Leave Clues

for Building a 

Larger Share of Stomach





It is important to note that these moments highlight some of the key mistakes and challenges Darden Restaurants has faced. Despite these missteps, the company continues to operate and adapt in a competitive industry. Let’s take a look at just how

 Darden Restaurants can take several strategic steps to regain customer support and enhance their brand reputation once again:

1.       Menu Innovation: Continuously refresh the menu with new and exciting dishes. Consider seasonal offerings, healthier options, and creative flavor combinations. Engage customers by seeking their input through surveys or social media polls.

2.       Quality Control: Ensure consistent food quality across all locations. Train kitchen staff rigorously and maintain strict quality standards. A single bad experience can deter repeat visits.

3.       Customer Experience: Focus on exceptional service. Friendly and attentive staff, clean facilities, and a welcoming ambiance contribute to positive customer experiences. Implement training programs to enhance service skills.


4.       Loyalty Programs: Introduce or revamp loyalty programs. Reward frequent diners with discounts, special offers, or exclusive events. Personalize offers based on individual preferences.

5.       Community Engagement: Participate in local events, sponsor community initiatives, and collaborate with nearby businesses. Show genuine interest in the community and build strong relationships.

6.       Online Presence: Optimize the restaurant’s website and social media profiles. Share mouthwatering food photos, behind-the-scenes glimpses, and customer testimonials. Respond promptly to online reviews and feedback.

7.       Health and Safety Measures: In the post-pandemic era, prioritize health and safety. Transparently communicate sanitation practices to reassure customers. Regularly sanitize dining areas and provide contactless options.

8.       Sustainability Efforts: Highlight eco-friendly practices, such as sourcing ingredients locally, reducing food waste, and using sustainable packaging. Customers appreciate businesses that care for the environment.


9.       Collaborations and Special Events: Partner with local influencers, chefs, or artists for special events. Host themed nights, wine tastings, or cooking classes. Create memorable experiences beyond regular dining.

10.   Feedback Loop: Encourage feedback from customers. Actively listen to their suggestions, address concerns, and adapt accordingly. A responsive approach builds trust and loyalty.

Johnson insists that good brands know that consistency and authenticity are key to long term success. By prioritizing customer satisfaction and staying attuned to market trends, Darden Restaurants can win back and retain loyal patrons to drive top line sales and bottom-line profits.

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. 



Thursday, February 29, 2024

Is Self-Checkout Technology Better than an Employee

 


In a time when there are more digital natives working and spending money than ever before retailers are evolving to give them what they want and according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® that means technology. There is no doubt that more and more retail foodservice executives are embracing self-checkout (SCO) capabilities, whether they already have kiosks in place or plan to install stations in the future.

Once again, there is a new survey was conducted on behalf of NCR Voyix Corp. by Incisiv entitled "The State of the Industry: Self-Checkout in Convenience & Fuel and Food & Grocery Retail," revealed 43% of retailers have mature SCO networks, while an additional 17% are planning to further scale up their self-checkout deployments.


SCO adoption rates currently vary by retail vertical; about half (53%) of retailers in the food and grocery segment have mature SCO adoption vs. 34% of retailers in convenience and fuel industry. However, convenience and fuel retailers plan to catch up quickly, with 37% currently piloting or scaling SCO deployments, according to the report.

Executives who have already implemented SCO reported benefits for both retailers and shoppers.  Now let’s look at some of the numbers that I’m sure will surprise you:


·         79% reported a better customer experience

·         75% believe the SCO stations enhanced store layout and space utilization

·         58% reported lower labor costs

·         51% reported improvements in operational efficiency

"Self-checkout is now essential for retailers aiming to provide a better and more convenient checkout, while also freeing up employees for other engaging and critical tasks like helping customers in the aisles or keeping inventory stocked," said Eric Schoch, executive vice president and president, retail at NCR Voyix.

Polled executives also commented on common technology woes:

·         Less than half (48%) reported it taking more than a month to roll out a standard bug fix or update at SCO terminals.

·         Nearly all (94%) retailers encounter challenges implementing simultaneous software updates across their store network.


To download the full NCR Voyix Corp. by Incisiv report entitled "The State of the Industry: Self-Checkout in Convenience & Fuel and Food & Grocery Retail," click here

Headquartered in Atlanta, NCR Voyix provides digital commerce solutions to the retail, restaurant and digital banking industries through comprehensive, platform-led SaaS and services capabilities. It employs approximately 16,000 staff members in 35 countries.

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



Wednesday, February 28, 2024

Finding Food Sales Success at the intersection of Share of Stomach and Share of Wallet.

 


Retail food sales success can be found at the intersection of growing your share of stomach and your share of wallet according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who stated these two metrics play a crucial role in understanding consumer behavior and competitive dynamic driving success today within the food industry.

The grocerant niche is filled with Ready-2-Eat and Heat-N-Eat fresh prepared food that can be portable and is found at all of the sectors listed below. Let’s first try to understand the term Share of Stomach.  So, Share of Stomach refers to the portion of a consumers food spending allocated to different types of eating options.  It answers the question: “Of all the money a consumer spends on food to eat themselves, where does the consumer spend it.  


The various options include but are not limited to:

1.       Fast food Restaurants

2.       Convenience Stores

3.       Dollar Stores

4.       Grocery Stores including Service Deli

5.       Meal Kits



6.       Full-Service Restaurants

7.       Stadium Food

8.       Street Fairs

9.       Limited-Service Restaurants

10.   Third Party Food Delivery Companies

So, just why is Share of Stomach important?  All food retailers need insights into what the consumers is eating in order to identify emerging trends consumption to evolve their menus, meals, and snack options to maintain customer relevance.

These insights include preference of consumers for the ilk; Hand Held Food for Immediate Consumption vs Sitting down at a table to eat. Drive-thru and pick up a meal vs Walk-in and Order a meal too go at a counter, Burger vs Pizza, Chicken vs a Steak, Spicy vs Bland.


Measuring share of stomach is done by data aggregators use polling or publicly available sources including U.S. Census Bureau and Bureau of Labor Statistics to collect share of stomach data. In addition, some firms track consumer credit and debit card transactions, segmenting them by establishment type / fast food, service deli, convenience store, grocery, bodega, online aggregator, stadium, street fare, etc.

Share of Wallet on the other had focus on how much a consumer spends within a sector aka grocery, convenience, restaurant, dollar store etc. With emphases on “how much a consumer spends on a specific brand’.  That is done within sector for example grocery Walmart, Kroger, Publix, Aldi then the same within Fast food example McDonalds, Burger King, Wendy’s, KFC etc. Then in Grocery for example companies drill down on category brands the ilk of Hunts, Hines, Kraft, Tyson, etc.

Share of Wallet answers the question “What portion of a customer’s total spend does a business capture?” While share of stomach looks at a broader food buying habits, share of wallet zooms in on specific brands. 


All that said, its where Share of Stomach and Share of Wallet intersect that brand value can be found and that is the intersection that can garner new customer if the retailer is leveraging relevant messaging that edifies both the consumers need set along with the undercurrent food trends.

The need to understand both metrics is required to maintain customer relevance as these metrics provide insights into consumer behavior, guide menu and product planning, and help brands adapt to changing trends.

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 participationdifferentiation 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