Retail Foodservice Turmoil

Going out to restaurants for lunch, dinner and breakfast was second nature for most Americans families during the late 1980’s, and 1990’s.  Consumer s went to breakfast at IHOP, lunch at McDonald’s, and at least once a week Pizza at a local Italian restaurant or the Red Roof Pizza Huts.

Today consumers order groceries from their computers at work, have them delivered to their home, or stop on the way home and pick them up at a ‘Click & Collect’ station. Some order meal kits delivered to the home customized to match the family flavor profiles then cook them to perfection for a perfect family home cooked meal never stepping into a grocery store. While many of us still like our restaurant meals we can now order them for delivery.  That means our favorite branded restaurant meal can be cooked to order and delivered just in time for dinner.  Thus another perfect home meal in front of the 65 inch ultra HDTV (The HDTV Syndrome).

Just when we became comfortable with this new retail paradigm the grocery sector is set to shake things up once again.  Now virtual food retailers are going physical.  Sainsbury’s is testing the sale of 2-person HelloFresh recipe boxes in 35 of their London stores. Both organizations are looking for new growth opportunities, with Sainsbury’s reaching beyond traditional CPG and own-label products and HelloFresh reaching beyond its subscription base. So we have the outsiders gong inside.  

Grocery retailers have capitulated market share to the restaurant sector for the past 25 years and today in the United States there are 28 restaurants for every grocery stores.  These new virtual retailers the ilk of Pated, Blue Apron, and Amazon Fresh have been quite a conundrum for legacy grocery stores.

In new research from Cardlytics, found that “spending on ecommerce meal kits surged 65% in the UK in the first half of 2016, and this is draining a “small but noticeable bite” out of traditional supermarkets sales.  Even more important Cardlytics found that “Customers who use these services spent 2.8% less at supermarkets in the first half of 2016, compared with the first half of 2015.” 

For virtual retailers the ilk of Hello Fresh Sainsbury’s is a new avenue of distribution that is even more inviting to consumers as it does not require a subscription. Hello Fresh garners incremental customer exposure.  Hello Fresh is offering a selection of five HelloFresh recipes boxes will be refreshed every six weeks to deliver variety.

Sainsbury garners another fresh choice for consumers that is branded.  This is nothing new as regular readers of this blog know legacy grocery stores feature THE FROZEN FOOD COURT you know that aisle in the frozen food section dictated to restaurant frozen branded chain restaurant meals.

Given legacy grocery stores success with the Frozen Food Court, the team at Tacoma, WA based Foodservice Solutions® just had to wonder out loud will a branded fresh food meal court be the next big thing for the grocery sector? 

www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us