Red Lobster Same Store Sales and Customer Counts Under Pressure

The Ready-2-Eat and Heat-N-Eat fresh prepared food niche aka the grocerant niche continues to expand in categories and points of distribution.  Regular followers have an understanding of the undercurrents of what is driving success within the retail food space today. The rest of you here it is in brief. Convenience stores, Drug stores, and Grocery stores are selectively targeting complacent legacy restaurant brands  products, positioning, and pricing with “better for you” fresh prepared food that consumer of late have said is “restaurant quality’.

Now Price Chopper Supermarkets has launched a “better-for-you” meal combo in its seafood department targeting Red Lobster customers.  Using the tagline “Create, Take and Bake” program, Price Chopper customers can choose a fish, cut vegetables and seasoning.  Then Price Chopper seafood workers  prepare, package, and price the customized entree in a steamer bag for home baking. The fresh prepared steamer bag is branded with the “Create, Take and Bake” logo that includes instructions for home baking.

There are a plethora of reasons in the past that consumers did not like to cook seafood at home. Red Lobster understood that and catered to those customers. Now enjoying a delicious seafood meal quick and easy,” is as simple as pointing out what you want. That is customization, personalization and differentiation.

The prices for a single meal including the fresh veggies and seasoning appear in a range from $5.99 for 6 ounces of shrimp to $7.99 for 5 ounces of tilapia. Yes, you can mix and match entrees.  The choices include popular fish ranging from salmon too haddock making it easy to  find something for the entire family.

Legacy chain restaurants not looking into new non-traditional points of distribution will be subject to increased competition from Foodservice Solutions® 5 P’s of Food Marketing. (price, placement, product, positioning, and portability).  The Ready-2-Eat and Heat-N-Eat fresh food grocerant niche continues to expand and is driving success in all channels of retail food. 

Foodservice Solutions® Grocerant Guru™ Steven Johnson has long pointed out that channel blurring is not in the minds-eye of the consumer it is only in the minds-eye of Neanderthal legacy chain marketers that continue to practice brand protectionism.  

Outside eyes can deliver inside sales. What are you bundling with you core products? Who are your customers?  Where and how can you sell your customers more? For more Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant  

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche.

Do Convenience Stores have a Competitive Edge Over Restaurants?

Restaurant customer marketing migration has been well documented by Foodservice Solutions® as regular readers of this blog know.  Foodservice Solutions® GrocerantGuru™ Steven Johnson identified five universal commonalities driving the customer migration and included them in the 5 P’s of food marketing.

Today restaurant industry leaders are pondering how to ebb customer migration and garner additional customers. One such leader is Ron Shaich CEO of Panera Bread who when writing about industry competitiveness said “You can go back and look at the top 50 restaurant companies 30 years ago; half of them no longer exist. They were sold, bought out, or hit the wall.”

Success does leave clues, here are some the clues.   Has your restaurant hit the wall? Meaning does your restaurant have flat or down customer counts? Are your sales per-store are still below 2008 levels? Are your profit margins less than they were 5 years ago? If so it might be is it time to sell, exit, or change?

Conveniences stores on the other hand as an industry sector have a 29% increase according to The NPD Group since 2008. They continue to garner the largest share of restaurant industry customers migrating.  They are doing it by expanding, bundling, fresh prepared food meal components as a direct competitor to the restaurant sector. 

Convenience stores the ilk of Sheetz, Rutters, Wawa, and 7 Eleven are all developing a differentiated customer experience that range from direct competition within the Quick Service Restaurant sector to Fast Casual.

In fact Wawa is positioned as Fast Casual To-Go and Sheetz identifies itself as a restaurant that sells gas. 7 Eleven on the other hand is developing 50% of its new stores without gasoline but with a focus on fresh prepared food.  Each of these companies are focusing on meal component bundling a hallmark of the Ready-2-Eat and Heat-N-Eat fresh food grocerant niche.

The convenience store sector is not the only sector targeting restaurant customers.  Chain drug stores have taken notice and entered the fresh prepared food niche. Specifically Walgreens with its Up-Market remodeled stores.  Convenience stores and Drug stores do not think this is a difficult time or environment in which to enter the fresh prepared food space.  In fact that they find it the perfect time to garner new customers, drive frequency, build bottom line profits.

Foodservice Solutions® Grocerant Guru™ contributes the new found success by both Convenience store and Drug stores sectors to the ability to leverage big data.  While many restaurants leverage loyalty programs, customer data that provides strong information on product, customer frequency and pricing opportunity. Conveniences stores and drug stores are looking at data outside the four walls.  Do you have Outside Eye’s?

Foodservice Solutions® specializes in outsourced business development leverage out Outside Eyes for inside Profits. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy Visit www.FoodserviceSolutions.us ,Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

 

Branded Food Success Beyond the Line Extension

Growing top line sales and bottom line profits in the retail food space is top of mind every day of the year. The first thing you learn in business 101 and marketing 101 is that line extensions are the least expensive way to increase sales and drive bottom line profits.  Line extensions are consumer acceptable, consumer relevant, and reliable to a point. 

So when do you know your restaurant brand, grocery brand or CPG brand is to that point?  Depending on your avenues of distribution the signals are a bit different. However Foodservice Solutions® Grocerant Guru® Steven Johnson has identified three universal commonalities they are:

1.       If either customer counts, transactions, and sales are flat or declining for six consecutive quarters.

2.       If none of the line extensions or LTO’s exceed 6.5% of sales in six consecutive quarters.

3.       In the C-suite justification and rationalization trump results.  

There are many companies that never get to that point. The picture above is from international recognized Brown & Haley Candy Company known for its Almond Roca buttercrunch toffee with almonds candy in the pink packaging. It must be noted that this candy company that has been in business 100+ and years edifies authentic to this day by using no artificial flavoring, colors or preservatives in Almond Roca. 

With a plethora of line extensions over the years last year Brown & Haley launched a new product in the alcohol space, Wine. Almond Roca Cream is an  indulgent flavored wine that combines almond, chocolate and toffee flavors all into a branded wine. Success does leave clues looking outside the box, while focusing on the brand can drive growth in new channels, while edifying traditional product sales with top of mind awareness.  

Outside eyes can deliver inside sales. What are you bundling with you core products? Who are your customers and where and how can you sell them more? For more Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant  

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche.

Restaurant Quality Meals for Home

Restaurant chain after restaurant chain beginning next week will start to report flat or down customer counts during earnings season.  Why, chain restaurants are known for not being early adopters and for not leading, but following the pack.  Many restaurant CEO’s believe doing no harm means doing nothing.  However when the customer has moved all retail food brands must move with them or risk losing share of stomach to competitors.  

We know three key reasons consumers are migrating to non-traditional food outlets. 

1.       They are time stared.

2.       The economy has created disequilibrium and inconsistent employment.

3.       They don’t like to grocery shop, but would like to cook, but don’t know how. 

While many restaurant chains had opted to sit back and simply wait for customers to return to their brands other the ilk of Cinnabon, Papa Murphy’s, Maggiano’s Little Italy and Bob Evans have experimented, engaged, and edified additional consumer brand relevance with non-traditional products in new non-traditional avenues of distribution.  

Entrepreneurs on the other hand identified the same set of consumer concerns, ceased the opportunity and jumped into the retail food space.  Not confined with self-imposed brand limitations there is a new set of entrepreneurs thinking out-side the box focusing on delivering branded solutions garnering share of stomach from migrating restaurant consumers. Here at Foodservice Solutions® we are getting asked all the time “why aren’t chain restaurants leveraging their brands this way as well?” 

Who are the companies and just what are they doing?  Here are three examples HelloFresh, Blue Apron and Plated currently are the leaders providing solutions to all but focusing on young urban professionals.  

These three companies are e-commerce reducing cost, the solution they deliver a branded “refrigerated box delivered weekly with up to three ready-to-cook “gourmet” meals, featuring pre-measured ingredients, fresh produce, meat and fish and detailed cooking instructions.” 

All meals take less than 45 minutes to prepared, the meals are creative and restaurant menu like, with flavor options you would find in a chain restaurant. The for the most part each company post the menu a week ahead, consumer can pick and choose what meals buy flavor and time to cook.   

Consumers lack the skill-set to cook from scratch as regular readers of this blog know, rest brands have the ability to extend their brands, menu’s and products directly into the home creating additional brand value while increasing share of stomach.  For more Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant  

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche.

Family Meal Assembly is the New Normal.

Want to cook a family dinner tonight?  Chances are you don’t really want to cook, don’t have time to cook, and don’t have the skill-set to cook.  So  what you are having at 4PM for dinner?  If your cooking for an at home family meal for two, three, or four, family members, chances are very good your buying several Ready-2-Eat or Heat-N-eat fresh prepared meal components.    Grocery stores, convenience stores and restaurants are all bundling fresh prepared meal components for the home cook.  The home cook is responding buying individualized components. .

Foodservice branded and private label food manufactures are all vying for your attention. Ready-2-Eat and Heat-N-Eat food from Swiss steak, Meatloaf, Baked Salmon, Rotisserie Chicken, Pizza and Lasagna fresh prepared, portioned and portable in portions for 1,2, or 5 are all available at most foodservice retail location including c-stores, drug stores, grocery stores and many restaurants.

Most exciting is the opportunity for new start-up’s and regional manufactures to produce sustainable business built on local, fresh and unique flavor profiles.  Legacy national brand manufactures are experiencing an increase in repositioning, consolidation and acquisition activities.  Regional start-ups are thriving supplying local restaurants, C-stores and grocery store delis.

Consumer are responding buying meal components in new food channels, experiencing new flavor profiles all the while individualizing the family meal.  The foodservice industry is evolving with the consumer.  Those companies looking for opportunity for growth times have never been better. The consumer is dynamic not static are you keeping pace?

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 Visit www.FoodserviceSolutions.us ,Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Want to Know What is Stifling Restaurant Growth?

The answer is: The 65 Inch HDTV Syndrome is slowing restaurants growth. Retail foodservice continues evolving with a strong focus on the consumer.  At the intersection of the consumer, technology and retail food sales we find the grocerant niche creating and expanding points of quality food distribution.  It’s at that intersection that Foodservice Solutions® Grocerant Guru identified one universal commonality driving consumers buying pattern changes.  Johnson calls it “The 65 Inch HDTV Syndrome.

The grocerant niche is the result of the blurring line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable, convenient meal solutions.  Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are perceived “better for you”, and portioned for one or two. Consumers like the Convenient Meal Participation, Differentiation, Individualization / Family Customization that these retailers offer.

Restaurateurs need to be particularly mindful of developments within grocerant niche for they are driving the change within the price, value, service equilibrium in retail foodservice.

It is at the intersection of the consumer, technology and The 5 P’s of Food Marketing: Product, Packaging, Placement, Portability, and Price that retail food sales competition is expanding. Driving ever greater Mix and Match bundled meal options and new points of distribution for consumers.  Consumers love the on-the-go options in fact Zaget’s 2013 NYC Restaurant Survey found that in New York at-home meals surpassed dining out for the first time in 30 years. 

GrubHub the nation’s number one online and mobile food ordering service data reveled that pre-game orders spiked more than 35 % for the first four weeks of the 2012 professional football season when compared to the same timeframe during the 2011 season.  With San Francisco, Phoenix, Oakland and Atlanta all leading the way.   “When it comes to watching football, the best seat in the house really is at home,” stated Susanne Dawursk, GrubHub’s brand marketing director.

More than just sports The 65 inch HDTV Syndrome is driving customers away from frozen foods as well. In a study from Packaged Facts, reports that sales in the $44 billion U.S. retail market for frozen foods have been flat to declining, with nearly all dollar sales gains attributable to inflation or new products -- not to increased consumer demand. The study found that Preference for 57 % of consumer say fresh foods the top reason why US consumers have not purchased frozen foods in the last three months, followed by preference for home-cooked meals.

Fresh prepared ready-2-eat and heat-N-eat food in non-traditional outlets poses an ever increasing threat to restaurant growth. Want to know how to best address The 67 inch HDTV Syndrome?  Contact Steven Johnson Grocerant Guru at: www.FoodserviceSolutions.us

For international corporate presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Restaurant Customer Counts FLAT Customer Migration Continues

The line between restaurants and food retailers is growing ever thinner. The fight for America's food dollars continues to intensify as consumers find fresh prepared Ready-2-Eat food options at a wide and growing array of outlets across almost every channel: convenience stores, chain drug stores, restaurants, grocery stores, club stores, vending and even more non-food retailers like dollar stores. While manufacturers, retailers and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This fight is taking place in what is called the grocerant niche.

The restaurant industry is not an industry known for trying to be first as in fastest to market with an ideation, food or technology advance. In the United States the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurants goal is simple feed one meal at a time in the restaurant while protecting and edifying the brand.

Historically chain restaurant leaders have denied the credibility of start-up competitors as non-relevant. The pizza sector is a great example; evolving from family dinning independents to national chain of "Red Roof" Italian, then to delivery only outlets and now take-N-bake is garnering market share in the pizza sector. (Note: Home Made Pizza Company and Papa Murphy's are further examples of take and bake pizza operators.)

Trends in the Food Industry Point to an Increase in Non-Traditional Meal Occasions

At the intersection of the consumer, fresh prepared food and technology we fine that consumer eating behavior is evolving and is now beyond the control of traditional food marketers. Evolving culture and lifestyle, demographics along with the new uncertain economy are all putting pressure on the American food consumer: Demands of work, economic shrinkage, demands of raising a family, commuting, social interaction, kid's after-school activities, all contribute to a food marketplace where convenience vies with price over legacy brands. Recent advances in food packaging and new points of non-traditional food distribution have empowered consumer choice, and Americans are embracing these choices even as legacy marketers cringe. Who's after restaurant food dollars… simply put… everyone.

Why should you care if Walgreens is selling fresh prepared Ready-2-Eat and Made-2-Order sandwiches? Why should you care if Whole Foods, Trader Joe's, Safeway and Wegmans are selling Ready-2-Eat and or Heat-N-Eat fresh pizza? Why should you care if Coinstar is selling Seattle Best Coffee at 1,000 locations for $1.00?

You should care because they are selling it, and you are not! The fastest growing sector of retail food service for the past five years has been the Convenience store sector. The C-store sectors growth in large part has been driven by fresh prepared food. Non-traditional avenues of distribution are growing, gobbling market share while establishing new patterns of consumption, price points and customer loyalty.

The Shopper is in Control Spurring New Retail Food Formats

Trader Joe's and Whole Foods have created Ready-2-Eat and Heat-N-Eat fresh prepared food items with qualitative differentiation as an entity with identity that has help propel them into Ready-2-Eat fresh prepared food leadership. In fact recent research shows that both Trader Joe's and Whole Foods are each known for high quality (restaurant quality) Ready-2-Eat and Heat-N-Eat foods with distinctive offerings. More important each is leading with innovative products and package size that create value and have positioned each chain as a food shopping destination for meal components customized and personalized for immediate consumption or mix and matched for a meal time at home. In short they are stealing your customers.

Walgreens fresh prepared food is restaurant quality and priced less than Panera Bread or Corner Bakery CAFE. Both Panera Bread and Corner Bakery CAFE thrive in urban locations. Walgreens is now growing price, quality and speed of service advantages over legacy retailers. Legacy restaurant chains must reconsider the speed at which they evolve and adapt or non-traditional outlets will capture profits margins as well.

Traditional views of meals and mealtime can pretty much be discarded. Legacy retailers waiting for the "next big thing" to copy simply might be out of luck this time. Legacy food retailers may not like to be first movers very much but it may prove that waiting too long will not work this time.

Product, Packaging, Placement, Portability and Price are Foodservice Solutions® 5 P’s

The retail food world is evolving at an ever increasing pace filled with innovation in food, portion size, points of distribution, and quality fresh prepared meal solutions. The price, value, service equilibrium is resetting in retail foodservice. In order to edify the brand and reinforce consumer relevance restaurateurs must leverage Foodservice Solutions® 5P's of food marketing. 

Many legacy food retailers continue to practice brand protectionism, stifle the brand while diminishing consumer relevance. The consumer is dynamic not static. Brands must be dynamic, evolving with the consumer. Four more years of watching other retail sectors thrive should be long enough. Success in the restaurant world is no longer simply about what happens within your 4 walls. Get Help Now:

Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant  

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche.