Monday, January 13, 2014

Restaurant Sales Are Down. Will your Restaurant Become the next Red Lobster or Ruby Tuesday?

Restaurant customer migration continues. Where is your customer eating today? Will they be back next week, next month, or next year?

Victor Fernandez, executive director of insights and knowledge for TDn2K, parent company of Black Box Intelligence and People Report stated in Nation’s Restaurant News that “On an aggregate level, 2013 was not a good year for the industry, which posted slightly negative same-store sales, but more importantly suffered through its third consecutive year of deteriorating same-store traffic growth,”

Restaurant customers are not eating any less.  They simply are eating fresh prepared Ready-2-Eat or Heat-N-Eat food from other non-traditional fresh food retailers. In fact Casey’s General Stores fresh prepared food drive an 11% increase in sales at the 1,678 unit chain.  So successful has Casey’s been they are now testing a stand-alone pizza restaurant.
Fernandez also found that “Annual same-store sales for 2013 fell 0.1 percent, a 1.0-percent drop from 2012, and the first time since 2010 that Black Box Intelligence’s index has resulted in negative same-store sales for the year.”  Is your restaurant brand practicing brand protectionism of the 1980’s, 1990’s that worked so well back then?
Whole Foods once had a unwanted moniker “Whole Pay Check” given by customer that though the food was over priced.  Not any more.  Today, Whole Foods is known for Fresh Prepared Reasy-2-Eat and Heat-N-Eat “better for you” food.  Today, new Whole Foods locations are about 30% smaller in size and sell 35+% of all sales of Fresh Prepared Ready-2-Eat food. If your customer is asking at 4PM What’s for Dinner?  The answer most likely is I’ll find it at a non-traditional fresh food outlet.
Are you still running template LTO’s based on consumer trends of 1990? Are your simply waiting for your customer to come back?  Well watch out.  Walgreens is not waiting, the new Up-Market stores they now sell fresh prepared sandwiches, sales, sushi, and beverages? Are you ready for an integrated contemporized grocerant assessment? Or are you simply waiting for perfect weather, returning customers and harking back the golden era of the restaurant industry?
Have you heard of Wawa?  Once a C-store chain they now describe themselves as Fast Casual TO-GO. This new Fast Casual TO-Go company is currently investing $550 Million in new units in Florida.  Who is your next and best funded competitor?  How do you plan to compete? Where are your sales and customer counts headed?

Visit:  if you are interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization  or learn more at Johnson, or

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