Foodservice and retail blurring - re-thinking food consumption and shopping
Anyone thinking of opening a grocery store today should be looking for a big space in a good location where they can strike the right balance between foodservice and retail to offer a one-stop food store experience where customers can come to eat, shop or both.
The secret to establishing the right blend is to curate the foodservice offer to include trendy dishes reflecting a variety of cuisines while getting the retail offer just right in terms of price and quality. This creates the synergies needed to attract footfall and establish a brand image.
One company that is doing this is Mercato Metropolitano, recently opened in London, a blueprint of how foodservice and retail are changing, as online encroaches, street food accelerates and big corporate fast casual chains are losing their lustre.
The rise of the foodservice-retail hybrids is the clearest evidence yet that the two industries are blurring. Players in this growing sub-sector have managed to combine and finely balance the two disciplines. A recurring theme behind the hybrids is the idea to get customers inspired by what they consume in store and then attempt to recreate those experiences at home.
Italy’s Eataly and Germany’s Kochhaus are leading examples operating a grocery-restaurant business selling the ingredients used in their restaurant meals as individual grocery items under one roof so that customers can cook those dishes at home from scratch while fresh in their minds.
A major consequence in the increasing channel blurring is that foodservices and retailers are having to raise standards and store experiences for their customers:
Leading fast casual players Le Pain Quotidien and Panera Bread are emphasising their fresh, natural and organic ingredients a lot more with the former running baking classes and the latter eradicating artificial ingredients and additives from their restaurant and grocery businesses.
Giant corporations have also had to adapt. McDonalds for example is in the process of removing antibiotic-treated meat and using less salt due to public pressure. Starbucks recently partnered up with Italian premium bakery chain Princi to try and shake off its mass market corporate image and position itself more as an artisan coffee and premium foodservice chain.
Hypermarkets are also having to innovate as they see the benefits of adding foodservices to their businesses. Dutch retailer Jumbo has rolled out its Foodmarkt concept that recreates the traditional outdoor farmers market vibe indoors, while French hypermarket E.Leclerc has added pizza and sushi takeaways to some of their click and collect drives. Some big-box Walmart stores have added local food companies as concessions like the one in Rogers, Arkansas that houses Big Rub BBQ giving the outlet some character.
Supermarkets are expanding their fresh ranges in order to attract footfall. US-based chains Kroger and Whole Foods have introduced local fresh food concept stores in Main & Vine and 365 by the Whole Foods Market respectively targeting health and socially-conscious millennials. UK’s Waitrose recently opened a store in Kings Cross featuring a wine and tapas bar, an in-store bakery and a cooking school, while some outlets now have sushi counters with trained chefs serving freshly prepared dishes.
As the two channels blur even more, the hybrid model will become the mainstream as the convenience of having all of your food needs in one place becomes more apparent. The assortment in the foodservice and retail mix is crucial to get right so being aware of current and future trends is essential. Premiumisation and fragmentation are hot right now as the ever influential millennial generation continue to shun the mass market. The boom in craft drinks (beer, sodas, coffee), artisan breads, homemade chocolates, premium burger chains (Shake Shack, Five Guys, Byron’s) and ethnic restaurants is evidence of this. The one-stop food shop revolution has begun.
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