Monday, January 7, 2019

Restaurant Chains New Requirement for Relevance Evolve Faster

Many of the retail food industry junior executives went to school 14 years ago and have begun to make their mark on their particular niche.  The rest of us member the ‘industry buzz’ of the day it was a book by Thomas L. Friedman title: The World is Flat.  In that book Friedman contended a company must be built to change if it wants to last. 
Regular readers of this blog remind me of that more often than I want to say.  I will say that many legacy chain restaurants that did not evolve fast enough have simply been slowly fading away.  Today food industry success is a four-step process according to Foodservice Solutions® Grocerant Guru® Steven Johnson.  Those four steps are Build, Measure, Learn, and Repeat always in an effort to drive relevance to today’s consumers.
Chain Restaurant success is determined by consumer’s choice.  The options consumers have for dinner have evolved to such a point that going to a restaurant for dinner is not the top choice for most consumers. Here is an example how non-traditional fresh food retailers side-step old fashion positioning for more customer focused, fresher, faster, food and beverage relevance that is built to evolve.
Starbucks is very close to 50 years old, bureaucratic, yet more innovative than most chain restaurants.  However, is that enough in 2019?  Like any bureaucratic company Starbucks has big plans for China. Today, China is the company’s second largest, after the U.S., and its fastest growing. Starbucks added nearly 600 locations there in its most recent fiscal year. It is now China’s largest coffee chain according to press reports.
Now getting back to customer relevance. Today Starbucks’ dominance in China is under threat from a company that didn’t exist just two years ago. That company is Luckin Coffee, which was founded in 2017, already has more than 2,000 locations in China and is quickly adding more. In fact, it announced that it plans to open another 2,500 locations by the end of 2019.  Think about its Starbucks has been developing in China for 20 years and has 3,600 locations there.
Reuters reported that Luckin’s rapid growth has come at a cost.  That cost, the company has been losing money to spend on its growth. Luckin, is not a traditional startup and different from Starbucks but wasn’t that what they said about Starbucks 50 years ago? Let me ask is your brands business model built for yesterday, today or tomorrow?
For international corporate presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. For more information visit , or call 1-253-759-7869

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