Convenience Stores Elevated Fresh Foods Sales Success Crushing Blow for Grocery Deli’s

 

At the intersection of growth fresh food sales specifically Ready-2-Eat and Heat-N-Eat prepared food the convenience store sector is simply trouncing the grocery store sector.  In fact, Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® stated, grocery stores should be embarrassed by the way the convenience store sector and garnered share of stomach by simply focusing on the eating habits of our evolving consumer.”

As the Grocerant Guru®, I've always championed the grocery store deli as a delicious and convenient option for busy shoppers. But let's face the facts, folks – convenience stores are giving the grocery store deli a run for their money. On top of that restaurant takeout food growth is simply another point of market share capitulation by grocery stores.  

Here's the skinny: Convenience store foodservice sales are booming, with prepared foods making up a whopping 33.9% of their in-store gross profits. That's a bigger slice of the pie than grocery store delis can claim these days.

Why the shift? Convenience stores are winning on three fronts:

1.        Speed and Simplicity: They excel at grab-and-go options. Think hot dogs rolling on a warmer, pre-made salads, and single-serve beverages – perfect for time-pressed customers.

2.        Value for Money: Convenience stores often undercut grocery stores on price, especially for prepared food items. Their lower labor costs and focus on pre-made options allow them to offer competitive pricing.

3.        Adapting to Trends: Convenience stores are constantly innovating. They're offering healthier options like fruit cups and yogurt parfaits alongside classic favorites. Plus, many feature hot food options that rival fast food joints.

But fret not, grocery stores are still too large to just fade away! They still have the upper hand in several areas:

1.        Variety: Grocery store delis offer a wider selection, with options to cater to different dietary needs and preferences. From gourmet cheeses to organic salads, we can provide a more customized experience.

2.        Quality: We can often boast fresher ingredients and higher quality preparation compared to convenience stores that rely heavily on pre-made items.

3.        Synergy with Grocery Shopping: The deli is a natural pitstop during a grocery shopping trip. Customers can grab a meal to go while picking up groceries for the week.

Want to Build a Larger

SHARE OF STOMACH

Focus on Today's Customers

Not Yesterday's Wall Street Metrics 

Here's a few ways that grocery stores could bounce back: They need to up their deli game! Focus in on:

1.        Fresh, Appealing Displays: Make delis look vibrant and appetizing.

2.        Shorter Wait Times: Streamline service to compete with the speedy nature of convenience stores.

3.        Innovative Offerings: Feature unique, chef-inspired dishes that can't be found at the corner store.

4.        Highlighting Quality: Showcase the fresh ingredients and culinary expertise that goes into deli offerings.

By combining the customer focused touchpoints including; convenience, price, and quality the grocery store deli can reclaim a place as a destination for grab-and-go meals. It's time to make the deli aisle a destination, not an afterthought.

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.

7 Reasons Consumers want more than one Cookie from Potbelly

 

If success leaves clues and it does, Potbelly, the iconic neighborhood sandwich shop, is bundling joy in a new 6-Pack Cookie Box is a clue that they correctly picked-up on according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Let’s get into it, the reasons are:

1.       Variety: Potbelly offers a wide variety of tempting cookie flavors, making it difficult to choose just one. From classics like Chocolate Chip and Oatmeal Raisin to more unique options like Snickerdoodle and Double Chocolate Chunk, customers might crave trying multiple flavors to satisfy their diverse preferences.

2.       Sharing: Potbelly cookies are known for their generous size, making them perfect for sharing with friends, family, or colleagues. Purchasing multiple cookies allows customers to enjoy their own treat while offering some to others, fostering a sense of social connection and enjoyment.

3.       Value: While the price of a single cookie might seem reasonable, buying multiples can sometimes be more cost-effective. Potbelly may offer deals or discounts on bulk cookie purchases, incentivizing customers to buy more than one.

4.       Indulgence: Potbelly cookies are known for being delicious and satisfying. Customers seeking a full sweet treat experience might find that one cookie isn't enough to fulfill their craving, leading them to purchase multiple cookies for a more decadent experience.

5.       Planning ahead: Some customers might be purchasing cookies not just for immediate consumption, but also for later enjoyment. Buying multiple cookies allows them to stock up and satisfy their sweet tooth throughout the day or even share them with others at different times.

6.       Fear of missing out: With such a diverse and enticing selection of cookies available, customers might fear missing out on trying other flavors if they only buy one. This can lead them to purchase multiple cookies to ensure they get to experience a wider variety of tastes and textures.

Potbelly’s collection of cookies are now available for fans to choose as a 6-pack in their favorite cookie flavor or as an assortment. Launching Monday, March 4, the 6-Pack Boxes will be available for purchase through the Potbelly App, potbelly.com, third-party delivery apps and in-shop. 

The branded 6-Pack boxes will be available at shops nationwide. All Potbelly cookies are baked fresh in-shop daily, offering a range of options including classics like the Oatmeal Chocolate Chip, Chocolate Brownie, and Sugar Cookies.

David Daniels, Chief Marketing Officer of Potbelly, stated, “Our fans have an insatiable love for our cookies and now we’re making it easier for them to enjoy together with others, share as a gift or save for later, as we package them up in a convenient new 6-Pack Cookie Box,” … “It promises to serve up smiles and turn an ordinary meal together into a memorable experience.”

For exclusive offers and rewards, Potbelly encourages fans to join the Potbelly Perks program, where they can unlock special offers on the entire menu. To sign up for the Potbelly Perks reward program, visit www.potbelly.com/perks, and, for more information on Potbelly, please visit www.potbelly.com.  

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. 

Grocers Grocerant Advantage Technology Driven Marketing Tool Kit

 

Grocerant Niche Ready-2-Eat and Heat-N-Eat fresh prepared food fuels consumer refrigerators at a rate we have never before seen.  I know, regular readers of this blog know that Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, has endlessly pontificated with insights from Foodservice Solutions® proprietary Grocerant ScoreCards, along with countless supporting facts from industry leading food focused companies. 

What has evolved into a “battle for Share of Stomach” the grocery sector has developed a food focused marketing tool kit driven with technology that if integrated properly could sway consumers back to the grocery sector according to Johnson.   

Are You Building A 

Larger Share of Stomach?

All food retailers understand that freshness is an important attribute that is key to staying competitive in today's retail market — whether the competing retailers are restaurants, convenience stores, supermarkets or other non-traditional foodservice outlets. Below is a recent recap from the NRF 2024:

Today retailers implementing technology-based automation solutions can make a major difference, shared Pat Iannotti, director of retail operations at Price Chopper Supermarkets/Market 32, while onstage at NRF 2024: Retail's Big Show on Jan. 15, 2024 stated.

Price Chopper had its own forecasting module, but prior to partnering with cloud-based platform provider Invrafresh and rolling out its production planning tool, it always seemed to be behind the trends on what customers were looking for.

"We realized that when you're not keeping up with the trends, when you're not keeping up with the customers, it could lead to one of two things, either overproduction or underproduction," Iannotti said during the "Unveiling Automation's Wow Factor With Invafresh" session.

Iannotti added that overproduction leads to more markdowns, higher shrink and spending labor where it isn't necessary, while underproduction leads to out-of-stocks, disappointed customers, and lost sales and profits.

The biggest difference in the company's processes is that the production planning tool "takes the guesswork out of fresh item management," he said. "There's no more gut feel that our teammates have to use when deciding how much product to make and at what times of the day to make it. They use the system."

The tool isn't a one-and-done solution, as company management continually examines the data to make sure that the algorithm's production recommendations are accurate. Retailers should prepare to put effort into employee adoption.

"It's a constant battle to get your folks to embrace the technology and not use it as a mandate," Iannotti said. "We want to teach them so that they see the value in what they're doing and realize 'boy, this makes my life a lot easier if I use this product.'"

The rise of complex, data-based solutions is a major boon for fresh foodservice, according to Matt Schwartz, CEO and co-founder of Afresh Technologies, which seeks to help grocers make smarter decisions throughout their fresh supply chain.

"Fresh food is the strategic heart of the retail business, especially in grocery. It's really what drives people to choose where they shop," Schwartz said during the "Driving Optimal Decision-Making in Fresh Grocery" session. 

He pointed out that in the past, even "mission-critical functions" such as ordering, replenishment, production, merchandising and supply chain were processed manually or by using systems that were not designed with freshness in mind. This prevented retailers from doing their best in the category and had a negative effect on the core customer experience.

Offering fresh products doesn't have to mean charging high prices. John Clear, senior director at Alvarez & Marsal Consumer Retail Group, pointed out that leveraging improved processes and performance can drive efficiencies and allow retailers to target customers that may be traditionally underserved in fresh while still making money.

Another important factor is the halo effect that fresh has on the broader store. "Interestingly with my current client and my current engagement, we see a really clear correlation between transaction growth for the whole store and then sales performance and fresh," Clear said.

The key is that the customer who needs to buy fresh items comes back more regularly and adds additional items when they do.

A quality fresh offering also contributes to the overall perception of a store, he noted.

The biggest challenges to success with fresh include high expectations of people who may not have the proper training tools and an ongoing time crunch. The complexity that comes with a responsive, market-focused fresh offering can also add to shrink and difficulty in executing.

"If I look at retailers that are really successful in their businesses and driving that halo effect and fresh, they find ways to drive the experience of fresh in their stores," Clear said. "They're having more of an assortment allocated to fresh food. They're more dynamically adjusting what they offer."

That's where today's fresh-focused solutions can make a big difference, according to Clear. "I think the opportunity then goes back to the how can technology, if it's purpose built for these fresh categories, actually make that a scalable thing for a retailer to roll out," he noted. 

In case you did not know, NRF 2024: Retail's Big Show, the National Retail Federation's annual show, took place Jan. 13-16 at the Jacob K. Javits Convention Center in New York. Are you utilizing all the tools in your marketing tool too your best advantage?

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

Fresh and Fast Bakery Items Can Drive Frequency and Profits

 

There is no doubt that Americans like hand-held food for immediate consumption in every daypart and bakery items will help drive customer frequency top-line sales and bottom-line profits when done right.  Most bakery items offered at fast food restaurants and convenience stores are hand-held and a perfect complement to any daypart meal or simply as a snack according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Treats and sweets can be a meal replacement or complement to any meal daypart according to Johnson.  To get an idea how to do it right below is an article by Alyssa Barrett, of Rich Products her insights can help you get a good feel for how to elevate your bakery options to drive incremental sales and profits.

“With mounting challenges like inflation and labor shortages, convenience store operators are examining the bottom line now more than ever.

Foodservice is a bright spot in the dim economic landscape, as convenience retailers saw a 14.3 percent year-over-year increase in total foodservice sales, based on the 2022 NACS "State of the Industry" survey. A vital component of every c-store foodservice program is the bakery case.

C-store customers are looking for an everyday treat, at any time of day — a morning pick-me-up, an afternoon snack or a late night treat. Craveable, snackable items satisfy these cravings, like cookies and doughnuts.

"The Future of Fresh Bakery" study from Rich Products reveals that 31 percent of consumers say they're purchasing more baked goods for an "anytime treat" now vs. previously.

This proprietary study examines how retailers —including c-store operators —can drive growth by evolving their fresh bakery portfolios, marketing and merchandising. The report, which analyzed data from 2020 through 2022, determined that an engaging bakery experience can lead to increased shopper frequency and impulse purchases.

Five key recommendations from "The Future of Fresh Bakery" study are:

1. Know Your Shopper

The consumer landscape is evolving. Five distinct shopper segments emerged in the study, based on consumer behaviors from the IRI Consumer Network Panel with attitudes, needs and usage survey information. Of the five bakery shopper segments, c-stores should focus on three:

·         Engaged Explorers are the sweet spot for c-stores. They spend the most per bakery trip and make up 16 percent of fresh bakery buyers. They are devotees with a love of exploration and variety. This segment indulges in satisfying a craving for themselves, sharing a fun treat with kids/friends, and including food in a social occasion with other adults. Engaged Explorers frequent the bakery case in the morning and also enjoy sweet snacks throughout the day. C-stores can reach them by creating visual stories, focusing on flavor variety across all fresh bakery categories, and creating limited-time offers (LTOs).

 

·         Special Treat Seekers make the most trips and comprise 24 percent of fresh bakery buyers. They crave baked goods with an eye on value and an appreciation for the specialness and fun of the fresh bakery. Special Treat Seekers make purchase decisions driven by price, especially compared with packaged bakery products. To score their sales, c-stores should offer special deals, promotions and a variety of smaller-sized options to create more "treatable moments."
 

·         Health Balancers are an important audience as they make up 15 percent of fresh bakery buyers and are health-focused shoppers with a preference for "better for you" baked goods. Since they believe "food is fuel," c-stores can win them over by providing premium experiences in a transparent, permissible way with smaller, individual or bite-size portions.

2. Create Ambiance

When a retailer understands its target audience, it's easy to create an environment that attracts, inspires and leads shoppers to purchase. All three of the target audiences —Engaged Explorers, Special Treat Seekers and Health Balancers —prioritized freshness as a key purchase driver for bakery items.

In the study, consumers ranked the attributes that drove their purchases, aside from taste, price and freshness. The bakery case's appearance rated highest in importance at 65 percent. Other top attributes were having a variety of options to choose from (55 percent), convenience (53 percent), and the aroma of fresh baked goods (48 percent).

Given these results, c-stores must keep the bakery case stocked and looking fresh throughout the day. This is why Rich's spent over three years developing extended shelf-life recipes for Fully Finished Donuts. All eight flavors maintain an airy, soft texture, fresh flavor and longer ambient shelf life.

3. Offer Variety

The study uncovered three types of anytime treats that every retailer should offer. The first is snackable breakfast and mini-meal items that are portable for eating on the go. To satisfy snack attacks later in the day, c-stores should also offer bakery items that are fun, flavor-forward treats that can be enjoyed every day. And another solid menu item is a delicious, "better for you" snack with an enticing, unique twist or flavor.

Premium bakery items deserve a place in the case since they were a purchase driver for 37 percent of consumers. Two out of three shoppers bought these indulgences because they said they "like to treat myself/my family." When asked what attributes signal "premium," shoppers stated fresh fruit (46 percent), visible inclusions (42 percent), unique flavors (42 percent) and some type of decoration (39 percent).

Popular brands also rated highly as 35 percent of consumers said that brand is important when buying baked goods. National favorites like Hershey's and Reese's are popping up in bakery items like brownies, and consumers are eating them up. Plus, brand recognition is a high driver in digital ordering and is a key catalyst for future growth and expansion.

4. Co-Locate Impulse Drivers

Brownies ranked as the highest impulse bakery purchase at 61 percent. Other items that enticed shoppers include cookies (51 percent), cinnamon rolls (47 percent), doughnuts (46 percent) and muffins (42 percent). To tempt consumers, c-stores should merchandise these high-impulse items adjacent to planned purchases, such as placing brownies by the fountain drinks and placing doughnuts by the coffee counter.

5. Leverage Loyalty

Consumers are making fewer trips to retailers and incorporating new ways of shopping, such as ordering via an app and using delivery or pickup options. The key to reaching these consumers is inspiring impulse purchases on the app. C-stores can do this by featuring LTOs, bundling discounts, and offering loyalty points for bakery purchases. The sight of a premium baked good bundled with coffee in the morning will tempt hungry morning commuters.

Focus on seasonal and limited-time-offers, which will create differentiation from other retailers.

Delighting the three target shopper segments will pave the road to sustained growth. However, note that there's room to increase frequency across segments and categories. Rather than focusing on one shopper opportunity, c-stores should develop longer-term roadmaps to develop, innovate, measure and refine strategies.”

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 us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter