Tuesday, November 13, 2012

Which legacy restaurant and grocery store chains risk becoming the next Tower Records?

The grocerant niche is evolving faster than legacy chains are willing to admit. The grocerant niche is developing new avenues of distribution, top line fresh prepared food sales/growth and bottom line profits for companies that never or haven’t in years sold fresh prepared food the ilk of Walgreens, Rite Aid, Sears, Amazon and 7 Eleven.

When Dominos pizza started opening “delivery only” locations around the country, Pizza Hut was the sector industry leader with Red Roof Pizza Hut locations nationwide.  Pizza Hut senior executives at the time scoffed at the brash upstart and never took it seriously.  After years of denial and market share capitulation by once proud industry sector leader, Pizza Hut was sold to Yum Brands. 

Today the pizza industry is now 50% grocery and 50% restaurant sales.  O ’how times have changed.  Restaurant and grocery chains are learning denial is not a step to success.  Burger Chef, grocery store chain A & P, are both all but gone.  At one time each was # 1 in units and sales within their niche
Technology and consumer meal preference behavior are driving change. We all know how fast Tower Records collapsed to online music downloading.  The foodservice industry is moving fast, with the grocerant niche garnering the lion’s share of new business.

The WSJ reports that “Cable companies have been losing TV subscribers at an ever faster rate in the last few months, and satellite TV isn't picking up the slack. That could be a sign that Internet TV services such as Netflix and Hulu are finally starting to entice people to cancel cable, though company executives are pointing to the weak economy and housing market for now.” This action has been called “cord-cutting”.

Where is your food brand going, where are your customer going?  Don’t let your retail food customer cut the cord too your brand.  Its time to understand why the Convenience store industry, Drug Store industry, Dollar Store industry and legacy grocery stores have all starting selling fresh prepared ready-to-eat and ready-to-heat food.  This convergence of food consumers and new avenues of distribution will forever change food industry retailing.  Is your company ready for the grocerant niche it or will your company go the way of Tower Records.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

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