Supermarkets have offered rotisserie chicken, wet salads and other similar prepared food items for some time, but today more supermarkets offer instore dining. And it’s working to their advantage. According to the market research firm, NPD Group Inc., eating dinner at grocery stores has risen seven percent to 1.8 billion visits per year over the last five years, while dinner at casual dining restaurants and fast food establishments has declined.
From 2007 to 2014 Whole Foods Market, the pioneer of selling fresh food items instore, more than doubled sales from $1.3 billion to $2.7 billion. The increase made them comparable to restaurant companies like Chipotle whose sales were $3.2 billion. Other grocery chains are catching on. Kroger Co. has begun its push by putting grilling stations in the meat and seafood areas. Many large chains and their banner stores, as well as independents, are getting on the fresh foodservice chain, and many have been doing it for a while and have started to ramp it up.
Whole Foods has opened more than 100 instore dining stations where customers can sit down to eat, have a glass of beer or wine, and about half of them offer a service staff in the form of waiters and waitresses to deliver food ordered off of a menu. They instore restaurants also have their own names to differentiate them.
Running a restaurant brings challenges and differs significantly from the grocery store business. Employees require a different skill set, and more complexities exist inherently. There’s lighting, design, seating etc., that need thought, planning and execution to attract and retain a different type of customer. Even with all of this taken into account, margins at a restaurant are higher than any other part of the store, says Bob Mariano, CEO of Roundy’s.
Also, an instore restaurant gives your store something very special. It provides a quality intangible that quantitative analytics can’t measure. Mariano told “The Wall Street Journal” last year, “We have regulars that come in to see their favorite bartender; people roam around or plan to meet people somewhere. They’re using us as a destination.”
While it might prove difficult and time consuming to just place a restaurant in the store, there are smaller steps that can be taken in order to gradually grow into incorporating a full-fledged restaurant. Carving out some space to put in a few tables and chairs in close proximity to the deli and foodservice station gives supermarkets a start to getting into the restaurant business. Once you have seating, slowly add to it over time with solid planning and help.
This year, Johnsonville debuts its turnkey Sausage Station Kiosk. With a small footprint, something like this with the addition of some seating would suffice to get a store introduced to a restaurant atmosphere with minimal investment and yet still allow for further planning and tiered execution in the future. Johnsonville offers a compliment of products to go with the kiosk giving it relevance for breakfast, lunch and dinner dayparts, as well as, snacking occasions throughout day, evening and night.
Hormel is another company introducing solutions to the deli/foodservice/instore restaurant landscape. The new “Deli By Design” program is a one stop shop for grocery retailers. Hormel covers every aspect from simply supplying cold-cuts to the deli all the way to creating a restaurant within the store. Hormel will come into the store to have a conversation and develop a custom program or programs to fit individual store needs and strategies.
Allowing customers the opportunity to eat and shop at the same place, at the same time, gives busy shoppers a reason to only come to your store. The saving of a trip means a lot to today’s busy consumer.