Monday, August 12, 2024

Grocery Stores Winning Restaurant Customers with Grocerant Niche Fresh Prepared Food

 


In the evolving landscape of foodservice, grocery stores have emerged as formidable competitors to traditional restaurants and convenience stores, carving out a distinct niche with fresh prepared foods. This trend, known as the "grocerant" phenomenon, has revolutionized how consumers approach meals, blending the convenience of restaurant-quality food with the accessibility of grocery shopping. Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, observed how this shift has become a critical battleground for consumer dollars, particularly as inflation and economic uncertainties reshape spending habits.

The Rise of the Grocerant: A Historical Perspective

The concept of the grocerant—grocery stores offering restaurant-quality, freshly prepared meals—began gaining traction in the late 1990s. As consumers became more time-strapped yet health-conscious, they sought meal solutions that offered the convenience of takeout without sacrificing quality or nutrition. At the time the foodservice industry called it a ‘home-meal replacement’ trend.  Grocery stores responded by expanding their fresh food offerings, initially with simple salad bars and ready-to-eat deli items. However, as competition intensified, these offerings evolved into sophisticated, chef-inspired meals that rivaled what one might find in a fast-casual restaurant.

Fast forward to 2024, and the grocerant niche has become a significant growth driver for grocery stores. According to the 2024 Supermarket News Fresh Foods Survey, retailers have increasingly leaned into prepared foods to capture the market share traditionally held by restaurants. This strategic focus on fresh, convenient, and high-quality prepared foods has allowed grocery stores to win over consumers who might otherwise turn to restaurants for quick meal solutions.


Recent Findings: The 2024 Supermarket News Fresh Foods Survey

The 2024 Supermarket News Fresh Foods Survey highlights the ongoing momentum in the grocerant space, despite a broader slowdown in perimeter sales. While nearly half (48%) of retailers reported increases in perimeter category sales, this marks a decline from 60% in the previous year, largely due to inflation and economic concerns. Yet, prepared foods continue to be a bright spot, with 66% of retailers planning to increase their assortments in the coming year, the highest of any fresh department.

Retailers recognize that consumers are looking for value and convenience in their meal choices. This has led to innovations such as third-party sushi vendors, expanded ready-to-eat meal assortments, and themed salad bars, all of which have been cited as significant "wins" by survey respondents. Notably, 38% of retailers plan to expand the space dedicated to prepared foods, underscoring the importance of this category in their overall strategy.

Competing with Restaurants: The Grocerant Edge

The competitive landscape for prepared foods is intense, with grocery stores increasingly pitted against fast-casual and quick-service restaurants. According to the survey, 54% of retailers view fast-casual chains like Panera Bread and Chipotle as their primary competitors, while 39% see traditional fast-food giants like McDonald’s and Chick-fil-A as significant rivals.

To compete, grocery stores are leveraging several strategies. Price and convenience are the most frequently cited advantages, with 64% of retailers emphasizing competitive pricing and 54% focusing on the convenience of grab-and-go offerings. Additionally, loyalty programs, limited-time offers, and promotions are being used to attract and retain customers who might otherwise choose a restaurant over a grocery store.


The Future of Grocerants: A Winning Formula

The grocerant niche is poised for continued growth, driven by consumer demand for fresh, convenient meal solutions that offer both value and quality. The 2024 survey indicates that while overall sales growth in fresh departments may have slowed, the focus on prepared foods remains strong. Retailers are not just maintaining their grocerant offerings but are actively expanding them, with a significant portion of their fresh department investment directed towards this category.

Moreover, the grocerant model aligns well with current consumer trends, including the preference for healthier, cleaner ingredients and the desire for meal options that cater to specific dietary needs. As grocery stores continue to refine their offerings and enhance the customer experience, they are likely to capture even more of the market traditionally dominated by restaurants.


Think About This: Grocery Stores as the New Go-To for Fresh Prepared Foods

Grocery stores have successfully tapped into the grocerant niche, offering consumers a compelling alternative to traditional dining out. By focusing on fresh prepared foods, they have not only retained existing customers but also attracted those who might have otherwise frequented a restaurant. As economic pressures continue to influence consumer behavior, the grocerant model will be increasingly vital for grocery stores looking to differentiate themselves and drive growth in a competitive market.

The grocerant phenomenon is more than just a trend—it's a fundamental shift in how consumers approach mealtime, and it's one that grocery stores are uniquely positioned to continue to leverage to garner back consumers they have capitulated over the years. As the Grocerant Guru®, I see this as a pivotal moment in the foodservice industry, where grocery stores are not just competing with restaurants and C-stores—they're winning back customers today. There is no reason however for restaurants or convenience stores not to reevaluate their current offerings and remain consumers go to choice for ‘What’s for Dinner’.

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




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