Can Grocerant Niche Meals and Meal Components Save the Grocery Store

 

Regular readers of this blog know that legacy grocery stores have lost market share to non-traditional formats including restaurants, convenience stores, dollar stores and fresh food delivery services that provide grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

One bright spot in 2023, for the grocery sector was deli prepared foods, their home for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. Let’s see why:

According to research from CreatorIQ:

1.       More than 78% of participants use delivery services every so often, while just 21.2% say they never order delivery.

2.       The survey found that Americans spend over $1,566 annually on food delivery services, with an average order cost of $35.42. On average, they order 3.7 times monthly, and delivery eats up 3.7% of their annual income.

3.       When ordering delivery, participants are most often in the mood for American (26.8%), pizza (23.2%) and Chinese (15.3%) out of every other type of cuisine. Regarding the most popular food delivery app, we found that DoorDash was the most widely used (45.5%), followed by direct orders placed through the restaurant (21.1%).

4.       Some Americans take their food delivery game seriously, with 23.5% members of delivery programs like Grubhub or Uber One. An Uber One membership offers attractive benefits like a $0 delivery fee on Uber Eats and up to a 10% discount on eligible Uber Eats delivery and pick-up orders.

Long wait times, inaccurate orders, service gaps and a lack of human interaction frustrate guests and pose challenges for operators and staff.

a.       Recent Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.8 % don’t know what’ s for dinner at 4PM.

b.       68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.

c.       Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.

d.       79.6% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 66.6% have two meal components per day.

e.       When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 91.3 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.4% chose meal components.

f.         Seventy-three percent of retail prepared food purchases are taken to go

g.       88.2 % of consumers prefer hand held food over sit-down meals with a knife and fork

Stop here and just consider the ramifications for legacy grocery stores if consumers deep down for most meals do not want to use a knife and fork for most meals.  Now let’s look at some more grocery info:

Deli market share in traditional supermarkets fell to 31.2% in 2023, down from 33.4% in 2019, and bakery share fell to 38.7%, down from 41.1%.

Across all outlets, deli prepared was up 5.6% in dollar sales and 1.2% in unit volume for 2023. That compares with a 3.6% gain in dollar sales for the deli category overall, and a decline in 0.9% in unit volume. Among prepared foods, strong dollar sales gains in prepared meats, sandwiches, and pizza helped offset declines in breakfast and combo meals.

Grab-and-go cheese also saw gains in both dollar sales and unit volumes, up 3.5% and 0.6%, respectively, and several deli entertaining sub-categories also saw gains in both dollars and units, including trays and spreads.

Bakery, meanwhile, notched dollar sales gains of 7.1% for the year across all outlets, and a decline in unit volumes of 1.1%. How much time do you want to spend in the kitchen this week?  What is the future of the legacy grocery store?  We know one thing, it is not, a Kroger and Albertson tie up. Nor is Walmart as it is positioned today (in the middle) the answer. 

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869