Saturday, June 30, 2018

H-E-B faces the Grocery store Conundrum Restaurant or Fresh Prepared Food

Many legacy grocery stores simply do not understand the consumer according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Regular readers of this blog know that Johnson believes that category managers have destroyed the grocery shopping by looking at what was sold in the store and its profitability while ignoring what customers are buying and at what price in other retail foodservice channels. 
Consumers in Texas where H-E-B is located are just like the consumer around the US according to Foodservice Solutions® Grocerant ScoreCards.  The team at Foodservice Solutions® was wondering out loud why in the word did H-E-B open a restaurant ‘taco shop’ inside one of their stores.  As outside observes they speculated that H-E-B opened the restaurant because their store are simply to damn big and/or the category managers can’t find enough food to sell customers or slotting fees to break even.
The “grocerant” trend is not just about restaurant sales it is about Ready-2-Eat and Heat-N-Eat fresh prepared food that consumers can buy in single, or family sized portions and mix and match meal components into a perfect family meal. 
It just might be time to talk about Ready-2-Eat and Heat-N-Eat fresh prepared food.  That is not food that is made in a commissary and scooped out of a bucket for two weeks and sold a fresh.  Today consumers can tell the difference.  Fresh is onsite or a regional kitchen that makes and distributes fresh food daily.  It is not meant to come in sealed plastic buckets, sit on the shelf for 6 weeks then be scooped out. That is not grocerant fresh food too consumers today.
Restaurants sales per square foot range on average from $525 to $580 dollars per square foot.  Yes, there are exceptions but it does not make much of a difference if it is a fast food format, fast casual, or full service the sales per square foot remain within those average.  My point is we have no problem with what the concept is we have a problem with the fact that most grocery stores don’t first make a serious effort to integrate a quality fresh prepared food program selling meal components before opening a restaurant.
Most regular readers of this blog remember what we said when Hy-Vee opened Wahlburgers. You have to understand that Hy Vee also has very large stores kinds makes you wonder just how Hy-Vee will integrated Wahlburgers brand values into their store.  We ask after one year will Walhburgers in Hy-Vee exceed the volumes of those outside / not in Hy-Vee?
In the last 12 years there are now 47% fewer traditional grocery stores in the US.  At the same time there are now 31 restaurants in the US for every grocery store.  Restaurants have problems of their own and restaurant customer counts remain flat.  Restaurants are not the solution to solving grocery store customer migration.  Success does leave clues and the team at Foodservice Solutions® has the clues and understand that a new business model is required if legacy grocery stores intend to regain foodservice importance.  Are you looking at what you sell or do you know what your customers are eating and where and why?
So just what is your New Electricity? Success does leave clues  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 a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email:

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