Saturday, January 23, 2010

The Top 3 Rules Restaurants Need for Competing Against the Grocery sector.

Here is a question I received this week: “I’d love your take on something like “The Top 3 Rules Restaurants Need for Competing Against Grocery.” Unless, of course, you think those rules are 1. Run, 2. Hide, 3. Call your mother.

Let’s give this one a shot! There is no doubt that competition for share of stomach is at a fever pitch in retail foodservice. When commodities price stared to fall in late 2007 and continued falling in 2008 every sector of the industry took short term advantage. When that simple strategy played itself out BAM; the race to lower price’s building marketshare began. Many complacent C-level executives could not contemplate just how wide spread and successful this would be.

Grocery stores and supermarkets dropped prices, consumers noticed and returned in droves. Restaurants responded first, Subway with $ 5.00 foot long. Now it a $3.00 bundled meal everywhere you look. Here’s the problem the first to raise prices now will lose! The focus on price is heighten; and the focus on price increases by media outlets will be even greater. That’s the set up, here’s what restaurants should do:

1. Innovate with new product, reduced calories or salt and portion realignment!

2. Green Packaging, less is more!

3. Re-tune Service, provide additional service to new niche consumers.

Grocery stores have the advantage of lower bulk pricing. Consumers are flocking to prepared food counters where sales are up 7.5 - 9% year over year! One problem, they are selling food from yester year, with and obvious lack of service!

Restaurants, particularly McDonalds have rolled out free Wi-Fi; they will start seeing customer linger at the tables. They need to provide additional levels of service to this new and developing following.

For more insights or if you a need a grocerant program review or grocerant assessment? Contact Foodservice Solutions of Tacoma, WA the global leader in the Grocerant niche. More about Steven Johnson: or

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