Saturday, March 16, 2013

Chain Restaurants Face New Increased Competition as Sales Slide Continues.

Restaurants have long won the battle over home cooking. Home cooking is not the problem. Chain restaurants are now facing increasing competition from companies that serve meals To-Go or Take-Away specifically prepared foods, including from grocery stores, chain drug stores, warehouse clubs, delis, convenience stores and yes other restaurants.

GuestMetrics, reported that based on its POS database of over $8 billion in annual sales, while table service restaurants and bars experienced a “slight sales decline of 0.3% in the 4 weeks ending February 24, 2013. That may not seem like much but the numbers were even worst the previous month. What is important is C-store sales were up and so were grocery sales.  If you look at Chain Drug Stores you get a mixed picture however fresh food sales in that sector were up.   

US drugstore chains see potential in offering fresh ready-2-eat and heat-N-eat food urban markets including frozen yogurt, lattes, sushi, and sandwiches. However drugstores don’t yet they consider restaurants competitors yet? Why? More important restaurants don’t consider drugstores competitors either.   This is becoming a race for share of stomach. Everyone is trying to cherry pick the restaurant industry and this sector is doing a very good job of it.

Walgreen’s has opened glossy stores that feature sushi chefs and enormous alcohol selections. In LA one Walgreen’s fresh food section offers high end fare such as octopus salad and green olives with hummus. There's also a juice bar whipping up smoothies.  CVS stores have added fresh sandwiches and produce in many locations. Rite Aid Corp. has been slow but in revamping its locations and bringing in packaged organic and gluten-free food trying to fend off Dollar stores.

Dollar stores are offering steak and fresh fruit and regular readers of this blog know that fresh fruit is FAST FOOD.  Times are evolving in the retail food space.  The battle is about share of stomach and consumers do not worry about channel blurring.  Channel Blurring is only in the minds-eye of the legacy food retailers.
Invite Foodservice Solutions® to complete a Migration Marketing assessment, grocerant program assessment. For brand, product placement, menu positioning assistance call Foodservice Solutions® today at 253-759-7869.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Johnson, or

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