Friday, January 20, 2017

Technology helps Restaurants stifle Grocery Store Sales

Today restaurants outnumber grocery stores 27 to one.   Simply put restaurants have become more successful in online digital customer adoption.   I admit the restaurant format is more conducive given the limited number of SKU’s, however it is and remains the primary pantry buster of the grocery sector. 

The fact is overall growth of the restaurant sector continues to flourish with new non-chain restaurants and independent non-traditional fresh food retailers according to US Census numbers.  

Regular readers of this blog know that consumers are fresh food focused. The increased demand for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food continues to fuel all sectors of retail foodservice growth according to NPD. Many legacy grocery retailers continue to treat grocerant niche fresh food as if it were a CPG product. 

Consumers understand fresh, they like fresh even more important they believe in transparency.  Treating grocerant niche fresh food like a CPG product has created a void in customer relevance for companies the ilk of Harris Teeter, Whole Foods, Mariano’s, and Sprouts Farmers Market as all are trying to reestablish relevance by evolving formats and concepts.

Salesforce’s Marc Benioff warned this week at Davos that “Technology’s frantic speed will create ‘digital refugees’ with no clear fix.” Foodservice Solutions® Grocerant Guru® askes have restaurants leveraged digital technology to garner a larger Share of Stomach already? 

Millennials migrate to faster, fresh food at and increased rate according to Foodservice Solutions® Grocerant Guru®. Pew Research Center found “Consumers between the ages of 18 and 35—so-called millennials—are expected to spend more than $200 billion annually starting next year and $10 trillion in their lifetimes” Roughly 77% of consumers ages 18 to 29 have purchased something on their phones, while 64% of consumers 30 to 49 have done the same.

That compares to a drastically smaller portion of older Americans that are doing so. Only 36% of consumers 50 to 64 years old have bought something on their phone and only 17% of those 65 and above.

The team at Foodservice Solutions® contends that if grocery stores continue to treat fresh prepared food like a CPG product of a bygone era they will continue to capitulate market share to chain restaurants, convenience stores, and new non-traditional locations.  

It appears that many legacy grocery stores will soon become a favorite spot for seniors, food stamps recipients, and ‘digital refugees’. If that is the case and if ‘digital refugees’ begin to expand at opposite ends the conundrum for grocery stores is that this are no margins in those groups.

Here is one example from Pew, “63% of consumers under 30 years old say they’ve used their phone in stores to check online reviews of a product. Only 13% of Americans over the age of 65 have done the same.”  The same numbers can be used when looking for mix and match meal components.

Millennials and GenZ continue to drive customer migration to grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food meals and meal components according to data gleaned from over 6,750 Grocerant ScoreCards.  Digital food discover drives path to purchase and right now the restaurant sector is leading the way. 

Foodservice Solutions® team is here to help you drive top line sales and bottom line profits. Are you looking a customer ahead? Visit for more information or contact: Remember success does leave clues and we just may the clue you need to propel your continued success. 

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