Enter the Grocerant

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Enter the Grocerant

05/20/2016

Grocery stores compete in every food category, have a great reputation for variety and freshness, and are a frequent destination for nearly everyone. With all this to offer, supermarkets are raising the bar on their foodservice offerings.

In-store dining and takeout of prepared foods from grocers has grown nearly 30 percent since 2008, and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015, based on NPD’s ongoing foodservice market research.

GROCERY ATTRACTS KEY RESTAURANT CONSUMERS

More than 40 percent of the U.S. population purchases prepared foods from grocery stores. From a potential purchaser perspective, grocery is more than half the size of quick-service restaurants’ (QSRs) reach. The purchase rate at grocery lags traditional QSRs’ frequency by nearly 10 visits in a four-week period, yet the purchase rate is impressive given that grocery has far fewer units than QSRs.

IT’S WHAT’S FOR DINNER

Grocery prepared foods peak at dinnertime. This meal occasion is tied to the types of prepared foods offered by grocers, and the convenience of doing other (stock up) shopping at the same time. The greatest vulnerability for traditional QSRs in competing with grocery stores is the evening meal and, to a lesser extent, lunch. As prepared foods gain acceptance and more grocers offer more alternatives to fast food, grocers’ competitive edge will improve.

LOYALTY: THE NEXT STEP FOR GROCERY STORES

Prepared foods purchased at grocery stores are purchased less frequently than foods ordered from a QSR. The majority of buyers who make a prepared foods purchase at grocery do so only once or twice in a month. However, watch out for that solid core of heavy QSR buyers who visit grocery stores more than seven times a month. While only 9 percent of overall buyers, they account for 30 percent of the grocery visits for a ready-to-eat meal.

IS GROCERY A TROJAN HORSE?

Those who buy prepared foods at grocery are also above-average users of QSRs. In all cases, grocery prepared food buyers are among the heaviest QSR users. Grocery outlets are building their business on the most important and valuable QSR customers.

VARIETY & HEALTHY OPTIONS

Visits when prepared foods are purchased from grocery stores are rated higher than traditional QSRs on variety and healthy options. These attributes are among the most important motivators of purchase and customer satisfaction. Grocery prepared foods are also rated higher on freshness and quality.

Convenience store operators and restaurant operators have to meet their customers’ expectations of the food they offer in order to compete effectively. The advantages for convenience stores and traditional QSRs tend to be operational or price-oriented, with consumers citing speed of service, value/affordability, and convenient location.

WHAT’S NEXT

Grocers are aiming to cater to all dining needs, including hot, custom-prepared grilled meat, food bars, soups and sushi. A growing number of grocery stores provide comfortable, casual seating for in-store dining.

Convenience stores and traditional QSRs are in a battle for market share. Increasingly, convenience stores and traditional QSRs need to include grocers as competition and monitor these competitors locally in order to track their inroads and market against the features that appeal to their customers.