Tuesday, April 27, 2021

Restaurant Customer Traffic Declines


Chain Restaurant menu prices continue to rise up 3.8% in April on a year-to-date basis, all the while wholesale food prices were up 3.9% year to date, according to the Bureau of Labor Statistics.  It’s looks as if restaurants are doing only slightly better than wholesale food prices.  That is a good start as all restaurants continue to accrue transitory cost.  Those transitory cost will continue to go up and down for at least the next 36 months.  So, who is after restaurant customers?  Companies that have positioned themselves by evolving business models better than most legacy chain restaurants according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®?

It’s time that chain restaurants should care?  Why, simply put they are losing customer relevance with customers and according to Johnson, in fact same-store traffic was down by 9.4% during March on a two-year comparison basis.  That’s not good.

While food consumers are a highly fragmented group there are universal commonalities creating channel disruptions. Consumers want, what they want, when they want it! Increasingly they want Grocerant niche Ready-2-Eat and Heat-N-Eat fresh food meals and meal components.  

Waiting for the ‘old days’ to come back is not a strategy that will work. Today, it is all about the consumer buying what the type of food they want, where they buy it ,and how they buy it is in flux. You can buy food from large format food retailers the ilk of Safeway Lifestyle stores, Kroger, Walmart, Ikea, or Smaller Format retailers like Trader Joe, McDonald’s, Burger King, Dollar Stores, Walgreens, and even fast casual restaurants.

Regular readers of this blog know that line between restaurants and food retailers is growing ever thinner. The fight for America's food dollars continues to intensify as consumers find fresh prepared Ready-2-Eat food options at a wide and growing array of outlets across almost every channel: convenience stores, chain drug stores, restaurants, grocery stores, club stores, vending and even more non-food retailers like dollar stores and most cost less per meal than at most chain restaurants. That helps drive relevance.

Food manufacturers, retailers and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This fight is taking place in what is called the grocerant niche.  I ask are you evolving your business model?

The restaurant industry is not an industry known for trying to be first as in fastest to market with an ideation, food or technology advance. In the United States the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurant’s goal is simple feed one meal at a time in the restaurant while protecting and edifying the brand.

Historically chain restaurant leaders have denied the credibility of start-up competitors as non-relevant. The simple fact is convenience stores, grocery stores service deli’s, and dollar stores are not start-ups? They are not raising prices on fresh prepared food they are introducing more new meal component options with full flavor and at very competitive price points.  Business models evolve.  Is your brand edifying your menu, footprint, and messaging with today’s relevance? 

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant

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