Sunday, July 14, 2024

The Convenience Store Best Positioned for Success: A Grocerant Guru Analysis

 


In the ever-evolving landscape of convenience stores, the key to success lies in understanding and leveraging customer touchpoints. Now according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, the convenience store that shines the brightest is the one that prioritizes fresh food, premium coffee, and ready-to-eat (RTE) and heat-and-eat (HNE) fresh food options. Let’s dive into why this approach is propelling convenience stores to new heights of profitability and growth.

Customer Touchpoint Relevance: The Heart of Convenience

Customer touchpoints are the myriad ways in which a customer interacts with a brand. For convenience stores, these touchpoints range from the physical in-store experience to digital interactions through apps and social media. The stores best positioned for success are those that create seamless, engaging, and relevant touchpoints at every opportunity.


Research shows that 80% of customers are willing to pay more for a better customer experience. This statistic underscores the importance of touchpoints. Convenience stores are capitalizing on this by offering loyalty programs, mobile ordering, and personalized promotions. By ensuring that every interaction is meaningful and convenient, these stores are building strong, loyal customer bases.

Fresh Food: The King of Convenience

Fresh food is not just a trend; it’s a revolution. Convenience stores that focus on providing fresh, high-quality food options are seeing significant growth. According to the National Association of Convenience Stores (NACS), sales of fresh food in convenience stores have increased by 4.4% annually over the past five years. This growth is fueled by consumer demand for healthier, more nutritious options.

Leading stores are investing in fresh produce, salads, sandwiches, and snacks. They are also partnering with local suppliers to ensure the highest quality and to support the community. This commitment to fresh food is not only driving sales but also enhancing the store's reputation as a go-to destination for quick, healthy meals.


Coffee: The Daily Ritual

Coffee is a staple in the daily routine of millions of Americans, and convenience stores are capitalizing on this. The market for coffee in convenience stores is projected to grow by 6.9% annually, making it one of the fastest-growing segments in the industry. Offering high-quality, freshly brewed coffee can significantly boost foot traffic and sales.

Innovative stores are going beyond the traditional cup of joe by offering a variety of premium options, including cold brew, espresso, and specialty drinks. These stores are also creating inviting spaces where customers can relax and enjoy their coffee, turning a simple beverage into a memorable experience.

Ready-to-Eat and Heat-and-Eat: The Future of Fast Food

The RTE and HNE segments are redefining the convenience store industry. These options cater to busy consumers who seek quick, delicious meals without sacrificing quality. According to a recent survey, 63% of convenience store customers purchase ready-to-eat meals at least once a week.


Stores are responding by offering an array of freshly prepared meals, from breakfast burritos to gourmet pizzas. The versatility and convenience of these options make them a hit among customers looking for hassle-free dining solutions. Moreover, the profit margins on these products are substantial, contributing significantly to the store's bottom line.

Profits and Current Growth Rate: The Numbers Don’t Lie

The financial performance of convenience stores embracing these trends is impressive. According to the latest data from the NACS, stores that prioritize fresh food, premium coffee, and RTE and HNE options report an average annual sales growth of 7.2%. This growth is driven by increased customer loyalty and higher ticket averages.

Profit margins in these stores are also higher. Fresh food and coffee typically yield margins of 50-60%, compared to the 30-40% margins of traditional convenience store products. The combination of higher sales and better margins results in robust profitability and a strong financial position.


Think About This: A Recipe for Success

The convenience store industry is at a crossroads, and those that adapt to the changing landscape are reaping the rewards. By focusing on customer touchpoint relevance, fresh food, premium coffee, and ready-to-eat and heat-and-eat options, stores are positioning themselves for unprecedented success. The numbers tell a compelling story: these stores are not only growing but thriving, setting a new standard for the industry.

As the Grocerant Guru®, I see a bright future for convenience stores that embrace these strategies. The journey to success is paved with fresh ingredients, aromatic coffee, and the convenience of ready-to-eat meals. It’s a recipe that’s sure to satisfy both customers and the bottom line.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.





Saturday, July 13, 2024

What Happens to Safeway When the Merger with Albertsons Fails?



Hello, fellow food enthusiasts and industry insiders! It’s Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® here, ready to dive deep into the grocery landscape and explore what might happen if the much-anticipated Safeway-Albertsons merger doesn’t go through. Success does leave clues. So, buckle up for a fact-filled ride as we examine the potential fallout, including store closings and the intensified competition from budget powerhouses Aldi and WinCo.

Store Closings: The Immediate Fallout

When mergers fail, one of the first tremors felt is in store operations. For Safeway, a failed merger with Albertsons could trigger a wave of store closings. Why? Let’s break it down:

1.       Redundancy Reduction: Mergers often aim to eliminate redundant locations. Without the merger, Safeway might be forced to streamline its operations independently, leading to closures in areas where their stores overlap with Albertsons.

2.       Cost-Cutting Measures: Operating on a thinner margin without the economies of scale a merger brings, Safeway may need to close underperforming stores to cut costs and improve financial health.

3.       Real Estate Optimization: Safeway might look to sell off or repurpose valuable real estate assets to generate cash flow. This could result in the closure of stores that occupy high-value locations but underperform in sales.

According to recent reports, Safeway operates over 900 stores across the United States. Even a conservative estimate suggests that 5-10% of these could face closure, affecting approximately 45 to 90 locations. This move, while financially prudent, would undoubtedly disrupt communities and employees alike.


Increased Competition: The Aldi and WinCo Effect

While Safeway grapples with internal challenges, external pressures from fierce competitors like Aldi and WinCo continue to mount. Here’s how these budget-friendly giants are shaking up the market:

Aldi: The Disruptor

Aldi has been on an aggressive expansion spree in the U.S., with plans to become the third-largest grocery retailer by store count by 2022. With their no-frills, cost-efficient model, Aldi appeals to price-sensitive shoppers looking for quality at bargain prices.

·         Store Count: Aldi currently operates over 2,000 stores across 37 states, with a target to reach 2,500 by the end of 2022.

·         Pricing Strategy: Aldi’s prices are typically 30-50% lower than traditional supermarkets, thanks to their streamlined operations and private label focus.

·         Customer Base: Aldi’s growth is driven by a broadening customer base that includes not only budget-conscious consumers but also those seeking organic and specialty products at lower prices.


WinCo: The Employee-Owned Advantage

WinCo, a lesser-known but formidable competitor, offers a unique value proposition with its employee-owned structure and focus on low prices and bulk purchasing.

·         Store Count: WinCo operates over 130 stores primarily in the Western U.S., with plans for steady expansion.

·         Pricing Strategy: Known for its low-price guarantee, WinCo competes aggressively on price, often undercutting larger chains.

·         Customer Base: WinCo attracts a loyal customer base with its bulk-buying options and extensive selection of low-cost, high-quality products.


The Bottom Line for Safeway

Without the merger, Safeway faces a two-front battle: internally, with the need to optimize and potentially downsize its store network, and externally, against the relentless advance of Aldi and WinCo. To survive and thrive, Safeway will need to:

·         Innovate: Embrace technology and enhance the customer experience through digital offerings, loyalty programs, and personalized services.

·         Streamline: Focus on operational efficiencies to reduce costs without compromising quality or customer satisfaction.

·         Differentiate: Leverage its strengths, such as fresh produce and prepared foods, to carve out a niche that resonates with its core customer base.

In the ever-evolving grocery landscape, adaptability is key. Safeway’s ability to pivot and respond to these challenges will determine its future in a highly competitive market. So, keep an eye on those aisles and stock up on your favorites – the grocery game is about to get even more interesting!

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information.  



Friday, July 12, 2024

The Grocerant Guru’s Guide: Repositioning Food Retail Brands for Customer Relevance

 


In today’s rapidly evolving food landscape, staying relevant is a challenge that no food retailer can afford to ignore. Foodservice Solutions® Grocerant Guru® Steven Johnson is here to illuminate why repositioning your retail food brand is not just a trendy suggestion but an absolute necessity. It's time to focus on creating a platform for consumer convenient meal participation, differentiation, and individualization rather than merely following the pack.

The Shifting Tides of Consumer Demand

The modern consumer is no longer content with the status quo. They crave convenience, but they also demand variety and customization. According to a report by the Food Marketing Institute, 79% of consumers seek out convenient meal solutions, and 63% are willing to pay more for these offerings. This trend highlights a significant opportunity for food retailers to reposition their brands to meet these evolving demands.

Convenience: The Cornerstone of Modern Retail

Convenience is king in the current market. Gone are the days when shoppers had the time or inclination to spend hours preparing meals. Today’s consumers are looking for quick, easy, yet nutritious meal solutions. Retailers who can offer a range of ready-to-eat or easy-to-prepare meals are likely to see a surge in customer loyalty and sales.

·         Fact Check: Nielsen data shows that the convenience food sector grew by 5.6% in 2023, outpacing the overall food retail growth rate of 2.8%.


Differentiation: Stand Out or Be Left Out

In a saturated market, differentiation is key. Consumers are drawn to brands that offer something unique. This could be in the form of exclusive products, unique flavors, or a distinct brand story. The grocerant model—where grocery stores blend elements of a restaurant—provides a perfect platform for differentiation.

·         Industry Insight: The grocerant sector is expected to grow by 10% annually, reaching $42 billion by 2025.

Individualization: One Size Does Not Fit All

Today’s consumers want personalized experiences. They desire products that cater to their individual tastes, dietary needs, and lifestyle preferences. Offering customizable meal options can significantly enhance customer satisfaction and brand loyalty.

·         Statistical Support: A survey by Deloitte found that 36% of consumers are interested in personalized food options, and 22% are willing to pay a premium for such services.


Creating a Consumer-Centric Platform

To achieve the trifecta of convenience, differentiation, and individualization, food retailers must create a consumer-centric platform. This involves investing in technology, engaging with customers, and constantly innovating.

1.       Invest in Technology: Utilize data analytics to understand consumer preferences and predict trends. Implement mobile apps and online platforms that make it easy for customers to customize and order meals.

2.       Engage with Customers: Build a community around your brand. Use social media and loyalty programs to create a dialogue with your customers, understand their needs, and gather feedback.

3.       Innovate Continuously: Stay ahead of the curve by regularly introducing new products, experimenting with flavors, and adopting the latest food trends.


Think About This: Embrace the Future with Confidence

Repositioning your retail food brand to focus on consumer convenient meal participation, differentiation, and individualization is not just a strategic move; it’s a survival tactic. By embracing these principles, food retailers can ensure they remain relevant and competitive in a fast-changing market. Remember, in the world of food retail, those who innovate and adapt will thrive, while those who merely follow the pack risk being left behind.

So, are you ready to embrace the future with confidence? The Grocerant Guru® certainly thinks it’s time to step up and lead the way!

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter



Thursday, July 11, 2024

Chain Restaurant CEOs Need to Spend More Time Focused on Share of Stomach

 


The team at Tacoma, WA based Foodservice Solutions® including Steven Johnson the Grocerant Guru® here, ready to serve up some tasty insights on a critical issue facing the restaurant sector and food industry today. As we witness a seismic shift in dining habits, it's high time for chain restaurant CEOs to pivot their focus towards capturing a larger "share of stomach." With Gen Z and Millennials veering away from legacy brand offerings, it's crucial to understand the forces driving this migration and explore new avenues of food discovery and distribution.

The Changing Palate of Gen Z and Millennials

Gone are the days when the allure of a big-name restaurant was enough to draw in the crowds. Today's younger generations, particularly Gen Z and Millennials, are redefining their dining experiences. According to a study by YPulse, 63% of Gen Z and 59% of Millennials prefer to try new foods rather than sticking to familiar brands. This trend signifies a growing appetite for novelty, diversity, and unique culinary experiences.

The Rise of Food Discovery

The pursuit of food discovery has led these generations away from legacy brands and towards more eclectic and diverse food options. Social media platforms like Instagram and TikTok play a massive role in this shift. A report by Morning Consult found that 53% of Gen Zers and 47% of Millennials have tried a new restaurant or food product based on social media recommendations. The visual and viral nature of these platforms fuels curiosity and encourages exploration, making traditional marketing strategies less effective.


Alternative Avenues of Distribution

As the Grocerant Guru®, I can't stress enough the importance of understanding the new distribution channels that are gaining traction. Ghost kitchens, food trucks, and meal kit delivery services are revolutionizing the way we access and enjoy food. Euromonitor International projects that the ghost kitchen market could reach $1 trillion globally by 2030. These innovative concepts cater to the on-demand, convenience-driven lifestyles of younger consumers.

The Decline of Legacy Brands

Legacy restaurant brands are feeling the heat. A study by Piper Sandler revealed that only 16% of Gen Z teens name a traditional fast-food chain as their favorite restaurant. Instead, they're flocking to niche, local, and artisanal food providers that offer authenticity and a personal touch. This migration away from well-established chains underscores the need for CEOs to rethink their strategies and innovate.



Capturing a Larger Share of Stomach

So, what can chain restaurant CEOs do to capture a larger share of stomach? Here are some spicy strategies from your Grocerant Guru®:

1.       Embrace Culinary Innovation: Experiment with new flavors, ingredients, and cooking techniques. Fusion cuisine and limited-time offerings can create buzz and draw in curious diners.

2.       Leverage Social Media: Engage with younger audiences on platforms they frequent. User-generated content, influencer partnerships, and visually appealing posts can drive food discovery.

3.       Expand Distribution Channels: Invest in ghost kitchens, food trucks, and meal kits. These flexible and scalable options can reach customers wherever they are.

4.       Focus on Sustainability: Gen Z and Millennials prioritize sustainability. A Nielsen report found that 75% of Millennials are eco-conscious. Implement eco-friendly practices and communicate them effectively.

5.       Personalize the Experience: Use data and technology to tailor dining experiences. Loyalty programs, personalized recommendations, and mobile ordering can enhance customer satisfaction.


Think About This

The dining landscape is evolving rapidly, and chain restaurant CEOs must adapt to stay relevant. By focusing on share of stomach and embracing the trends of food discovery and alternative distribution, they can tap into the desires of Gen Z and Millennials. As your Grocerant Guru®, I encourage these leaders to spice things up and innovate. The future of dining is diverse, dynamic, and delicious!

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday than tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.



Wednesday, July 10, 2024

What Happened to Dinner Time?

 


Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, is here once again to dish out some delicious insights on a topic that's been simmering on the back burner for a while: the decline of the traditional family dinner. Once a staple of family life, dinner time has undergone a radical transformation. Let's dig into the facts and figures behind this culinary conundrum.

The Decline of Family Dinner Time

Gone are the days when families gathered around the dinner table at a set time each evening. According to a study by the Hartman Group, only 30% of families manage to eat dinner together every night. This number has been steadily decreasing over the past few decades. So, what's behind this shift?

The Rise of Individual Meal Times

Modern life is a whirlwind of activities, commitments, and diverse schedules. A study by the American College of Pediatricians found that 60% of parents report having less time for family meals due to work and extracurricular activities. This has given rise to "individual meal times," where family members eat whenever it's convenient for them.



The Impact of Technology

Technology has also played a significant role in this shift. The Pew Research Center found that 88% of adults and 95% of teens own a smartphone. With so many screens vying for our attention, it's no wonder that dinner time is often disrupted. Instead of conversing over a home-cooked meal, many families find themselves eating in front of the TV or while scrolling through social media.

Convenience Foods and Grocerants

As the Grocerant Guru®, I can't help but highlight the role of convenience foods and grocerants (grocery store restaurants) in this trend. The Food Marketing Institute reports that 63% of consumers purchase prepared foods from grocery stores at least once a month. These ready-to-eat meals are perfect for busy families who don't have the time or energy to cook. Grocerants, with their wide array of fresh and convenient meal options, cater to this growing demand for quick, individualized dining experiences.

The Social and Nutritional Implications

While individual meal times offer flexibility, they come with their own set of challenges. Studies have shown that families who eat together tend to have healthier eating habits. According to the Family Dinner Project, children who regularly eat with their families are less likely to be overweight and more likely to eat nutritious foods. Additionally, family meals provide a valuable opportunity for communication and bonding, which is often lost when everyone eats separately.

Do you Want to Build A 

Larger Share of Stomach?


The Grocerant Guru's Tips for Bringing Back Family Dinners

While the traditional family dinner might be on the decline, it's not entirely extinct. Here are a few tips from the Grocerant Guru to help bring back the magic of shared meals:

1.       Plan Ahead: Set aside specific days for family dinners and involve everyone in meal planning. This can create anticipation and make the meal more special.

2.       Unplug During Dinner: Make the dinner table a no-phone zone to encourage conversation and connection.

3.       Utilize Grocerants Wisely: Take advantage of the convenience offered by grocerants, but try to eat these meals together as a family.

4.       Make It Fun: Turn dinner into a fun activity. Try themed dinners, cooking together, or even having a picnic in the living room.


Think About This

The evolution of dinner time reflects broader changes in our society. While the shift towards individual meal times offers convenience, it's important to remember the value of shared meals. As the Grocerant Guru®, I encourage you to find a balance that works for your family. Whether it's once a week or every night, make an effort to sit down, share a meal, and savor the moments together.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter