Restaurant Consumers Are Not Eating Less Just Some Where Else.

Ever wonder where restaurants customers go when they don’t go to restaurants? After years of down numbers and flat sales restaurant sales declined for a second month in a row, hope for the rebound in the restaurant sector are fading.

Consumers are Not Eating Less. Foodservice Solutions® has been tracking and reporting on the evolving retail food space since 1991.  Here is some recent industry data others are now reporting you should also know:

Black Box Intelligence released its Restaurant Industry Snapshot port for July this week, the Snapshot report showed the second straight month of sales declines this summer.  The report found “Restaurant same-store sales decreased 0.9 percent in July, continuing to fall from flat sales in June and a 0.8-percent increase in May. Same-store traffic declined 2.2 percent, slightly better than the 2.5-percent decline in June.”

That may not seem like a large decline but when you understand the fresh prepared food sold at convenience stores rose 7.9% year over year last year.   That Whole Foods sales of fresh prepared food has hit 25% generating 32% of the company’s bottom line profits you begin to see that the ready-2-eat and heat-N-eat fresh prepared food niche is driving change within the retail food space.  Do you know how to position your brand against new non-traditional points of fresh prepared food ready-2-eat and heat-N-eat distribution?  We do, we wrote the book.

Even Legacy Technomic’s new Consumer Brand Metrics:Retail Meal Solutions report suggest consumer like ready-2-eat and heat-N-eat fresh prepared food.   Foodservice Solutions® found Consumers are not eating less however the undercurrents of retail food consumer evolving is driving change in the retail food space.  Here is what Technomic found:

“Nearly half of consumers polled (45 percent) have purchased prepared foods at Walmart within the past month, leading all other retailers measured.”

“In the value category, Costco leads the way in prepared-food prices relative to other, similar retailers with 88 percent of consumers considering Costco’s prepared-food item prices to be good or very good.”

“A vast majority of consumers (93 percent) agree that Trader Joe’s has an excellent reputation, followed by Whole Foods Market (90 percent).”

Regular readers of Foodservice Solutions® Grocerant Guru Blog understand all too well the undercurrents and developments within non-traditional points of fresh food distribution and the effects occurring within the retail food space.  The consumer is dynamic not static and restaurants must define their concepts and align themselves with the evolving consumer or risk losing consumer relevance.

Steven Johnson is Grocerant Guru at Tacoma, WA based foodservice consultancy Foodservice Solutions® and writes a blog at: http://www.grocerants.blogspot.com. He can be found on linkedin at:linkedin.com/in/grocerant,facebook.com/Steven Johnson, Twitter.com/grocerant Email Contact: grocerant@q.com Website:  www.FoodserviceSolutions.us

Retail Food Competition Driving Restaurant Franchisee Discontent

Whole Foods continues to drive top line sales and bottom line profits with fresh prepared food stations located in all of their new smaller footprint units and legacy stores.  Once a thriving convenience store chain that sold food, Sheetz now calls itself a restaurant chain that sells gasoline.  Wawa a consumer driven convenience store once located in the Northeastern United States has committed $550+ million dollar to expand in Florida and describes its self as selling restaurant quality fast casual food to-go. In our new Omni-channel retail world legacy restaurants companies are feeling competitive pressure.

Even the strongest of restaurants brands are feeling the heat.  Bloomberg News is reporting that, McDonald's facing a "brewing franchisee revolt".  Elevating the discontent are the undercurrents of competition.  The discontent resurfaced Bloomberg reported when the burger chain “increased fees and costs that the independent business owners pay, such as rent, software and remodeling. Not surprisingly, rising expenses are discouraging franchisees, who operate about 90% of the chain's U.S. locations, from opening new restaurants or refurbishing existing ones”…

The operators say McDonald's has been squeezing them for a while as its overall business stagnated. …noting that the revenue, including rent and fees, McDonald's took in from franchised stores has risen an average of 8% during the past five years, double the 4% increase in total revenue during the same time.

In addition the Bloomberg report said “Some franchisees are paying 12% of their sales in rent, an increase from the historic levels of 8.5%. Since U.S. McDonald's locations on average net about $2.5 million in annual sales, operators who recently renewed leases are paying an average of $300,000 under the new rate, a steep increase from the $212,500 under the previous rate. Not surprisingly, franchisees want McDonald's to roll back fees to the old rate.”

McDonalds understands the consumer right now better than it seemingly understand it franchisees.  Franchisee disequilibrium is important but not as important as the consumer.  Restaurants must refocus on maintaining or growing share of stomach. They must understand the consumer is dynamic not static and meal bundling mix and match options in new non-traditional are a threat their brand.  Success does leave clues and ready-2-eat and heat-N-eat fresh prepared food is driving customer migration. 

Outside eyes can bring new light and assist in your successful growth by creating a platform of insights for consumer convenient meal participation, differentiation and individualization. Don’t wake up one day and find that you or your company slept; while consumers were on the move.

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant, twitter.com/grocerant, or www.FoodserviceSolutions.us

Food Marketing for Millennials

Restaurants, Convenience stores, and Grocery Store brand marketers all try to garner influence with the millennial generation. The millennial generation is evolving. Is your brand evolving?  Brand marketers seeking insights into millennials behavior, media usage, brand buying preferences, and values must evolve as well.

In a new book Marketing to Millennials Jeff Fromm co-author said “A large portion of millennials have grown up. By overlooking the fact that many millennials are now parents, brands could miss changes in behavior and consumption that directly impact their bottom line.” …“Millennials are often inaccurately portrayed through the prism of youth and all the character traits that go along with it—narcissism, rebellion and entitlement to name a few,”

Today looking at the older half of millennials alone you find 10.8 million millennials households with children. More important 80% of the 4 million U.S. births can be attributed to millennials and that number will simply continue to grow.

When asked by Fromm an EVP at Barkley “What one retailer would millennial parents shop at for the rest of their lives?”  This the world’s most” tech-savvy” generation might surprise you.  The millennial parents when given the choice to shop at one store for the rest of their life, between Amazon.com, Wal-Mart and Target, millennial parents chose Wal-Mart.

Even as the world’s most tech-savvy generation, millennials who have kids opted for the brick-and-mortar locations of Wal-Mart and Target over online darling Amazon.com. Legacy restaurants, grocery stores and C-stores all have a huge opportunity with millennials.  Understanding how to verticaly intergarte ready-2-eat and heat-N-eat fresh prepared food into your existing brand and store footprint will be key to long term success. 

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant, twitter.com/grocerant, or visit www.FoodserviceSolutions.us

Convenience Stores an Evolving Fresh Food Competitive Threat.

Once straddled with a troubled brand identity, high prices, and no fresh food, C-stores today are garnering customers to their units focusing on fresh ready-2-eat and heat-N-eat prepared food.  Restaurants and grocery stores are looking around and finding their customers eating, a hoagie from Wawa, Made to Order fresh food from Sheetz and pizza delivered by Casey’s General Store.

If you continue to Harkin back you can remember when the emphasis was on selling gasoline, beer, and packs of cigarettes at convenience stores.  With consumer focus changing C-stores have changed as well.  Today Wawa describes itself as selling FAST CASUAL FOOD TO-GO  and Sheetz describes itself as a restaurant and won an prestigious award while being honored at Nation’s Restaurant News MUFSO event in 2012.

While most restaurants still don’t consider Convenience stores a threat.  That should know that by leveraging social media and in-store promotions, the ilk of chain restaurants consumers are migrating driving top line sales and bottom line profits within the C-store sector. Grocery stores are beginning to feel the pinch as well. Many grocery store chains are now starting branded convenience stores themselves.  Consumers like the smaller footprint and fast service combined placing value on the greater mix and match meal bundling options available at c-stores.

Focusing on fresh prepared ready-2-eat and heat-N-eat food the convenience store sector is evolving with the consumer faster than any other retail food sector today.  In fact 50 % of 7 Elevens new units do not offer gasoline at all.  All of 7 Elevens new units are offering expanded fresh food offerings.  Did you know 7 Eleven has over 50,564 units around the world?  How many do you have?

C-stores are promoting “fresh” food with POP in windows, at the pump, on the radio and TV.  Many offer free products samples and some offer free product days. C-stores abandoned products and financial models of the past focusing on the consumer of today and tomorrow. Evolving with the consumer is paying dividends for convenience store garnering market share in the fresh food space from restaurants, grocery stores.

Focusing on consumers today C-stores are embracing the hallmarks of the grocerant niche from more flavorful food to creating a platform for convenient meal participation, differentiation and individualization.   

Outside eyes can deliver top line sales and bottom line profits.  Invite Foodservice Solutions® to provide brand and product positioning assistance or a grocerant program assessment. Visit: www.FoodserviceSolutions.us for more or Steven Johnson and Foodservice Solutions® visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant 

Maggiano’s Little Italy Evolving with Consumers

Americans love affair with Italian has not dissipated.  Italian food was at one time the leading ethnic food in America.  Today Italian is close to mainstream food not crowed out by Thai, Mexican, Brazilian, or Peruvian but rather considered a family planning meal staple, something everyone likes and eats.

Maggiano’s Little Italy specializes in serving homemade, classic Italian-American cuisine and portions in classic restaurants that are comfortable, contemporized, compelling in authenticity. What Maggiano’s does better than most as a chain restaurants is finding success as it evolves with consumers.

While consumer have been migrating to the grocerant niche filled with ready-2-eat and heat-N-eat fresh prepared food. Maggiano’s has as well.  They offer many classic pasta’s all from a selection for handmade pasta’s and baked specialties to enjoy in the restaurant, and then choose a second dish to take home and enjoy later. Pasta today and pasta tomorrow, success does leave clues and no other restaurant chain does ready-2-eat and heat-N-eat fresh prepared food as well as Maggiano’s.

In addition Maggiano’s has a “Marco’s Meal for Two” it is a three-course meal for two that include the guests’ choice of an appetizer, flatbread, or two side salads; two classic pastas, plus two classic pastas to take home; and one dessert.  Few chain restaurants have evolved with consumer contemporized relevance as Maggiano’s.  Outside Eyes can provided inside results call Foodservice Solutions®.

Some legacy restaurants keep using the “Four Wall Theory” while Maggiano’s thinks about your kitchen table, TV Room and office. Maggiano’s offers both Take-Away and Delivery service as well as inside seating.  The grocerant niche continues to boom, companies the ilk of Maggiano’s Little Italy that evolve with it will continue to grow top line sales and bottom line profits. 

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

What is for Dinner? Time Saving Ready-2-Eat Grocerant Food.

Its 4 PM: your customers are just beginning to think about what's for dinner. 81% of American consumers are unsure about what's for dinner. Time Starved Consumers are looking for high quality ready-2-eat foods and heat-N-eat meals. Today's time starved consumer wants to purchase meal components that they can bundle into a customized family meal that will please everyone without spending time cooking.

Examples of Grocerants

Restaurant examples are McDonalds, Pret A Manger Burger King, Pizza Hut, Papa Murphy's and Starbucks, each having a fresh ready-2-eat or heat-N-eat food menu. You may not think of Walgreens as a food destination yet Walgreens sells fresh soft-serve yogurt, coffee and sushi at selected stores, so they are technically grocerants. In the Casual Dining sector Maggiano's Little Italy offers a buy one take a 2^nd home for free in their Classic Pastas menu section.

Convenience Store examples are 7 Eleven, Wawa, Sheetz and QuickChek, all of which sell fresh and prepared sandwiches, salads, beverages.

Supermarket examples are Whole Foods, Central Market, Safeway and Kroger… all sell fresh prepared chicken, salads, sandwiches and most offer sushi and beverages.

The retail supermarket and convenience store sector have unique grocerant challenges. Presentation of the ready-2-eat and heat-N-eat food is important. When you get a meal at a restaurant, the plate and the food look great… let's call this "food for now". Retailers are primarily selling "food for later" or take-out and unless an item is a sandwich, the looks of ready-2-eat meals and snacks must begin to change.

Why is it so hard to package food to go? In the Hot food section of the grocery store the food in most cases does not look appealing so our expectations drop when we get it for Take-Away. In convenience stores like Wawa, the ready-2-eat food looks great in the to-go containers. Why? Because Wawa puts the entire package together. They exert more control on the look and feel of "food for later".

Around the world we are now seeing sections in department's stores and kiosk in malls in Europe and Asia and airports around the world. The items can range from entrees to side items and deserts. Some examples of items range from fried chicken, mash potatoes, cream spinach, to liver and onions, pizza, hot dogs, steak, prime rib, various casseroles (hot-dish) to salads, side salads pie, cake and any single proportioned deserts. They can be picked up at the specific unit, or delivered.

Consumers have been exposed to a plethora of flavors and have not the time to master the skill of cooking each.  The rapidly growing grocerant trend is empowering the consumer to establish new customs and traditions in eating better, more flavorful food.  The Grocerant niche is about convenient meal participation, differentiation and individualization.

At Foodservice Solutions® we can help you identify, quantify, and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche 253-759-7869 visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant, www.FoodserviceSolutions.us

Starbucks Stellar Same Store Sales

Do you monitor restaurant, grocery, or any retail food sales numbers?  If so you know that on July 25 2013, Starbucks delivered its numbers and that they reported double revenue and profit beating the street estimates.   That is very impressive.  Now consider that Starbucks is 42 years old.  How old is your company?  What are you’re year over year sales numbers?

With worldwide comparable sales (comps) of +8% and +9% comparable sales in the US Starbucks leads all other restaurant companies.  That is what happens when in an Omni-channel food retail world a company’s focus is on the consumer first. Foodservice Solutions® clients and regular readers of this blog understand that Starbucks is a Food Merchant not just a restaurant selling coffee and coffee products.

Howard Schultz is a merchant first, food retailer second that edifies the Starbucks brand with consumer relevance.  There were no excuses, justifications on or for the economy the past three years from Schultz.  His focus is, was and continues to be on the evolving consumer and his desire to evolve with the consumer.

The grocerant niche filled with ready-2-eat and heat-N-eat fresh and fresh prepared food continues to drive top line sales and bottom line profits in every sector of retail foodservice today.  Brand viability requires that contemporized relevance be maintained. In an Omni-channel retail world no company needs to look further than Starbucks when looking for an example of success.  Success does leave clues.  Starbucks is one clue.

Outside eyes can bring new light and assist in your successful growth by creating a platform of insights for consumer convenient meal participation, differentiation and individualization. Don’t wake up one day and find that you or your company slept; while consumers were on the move.

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant