The Power of Foodservice At Retail: What Comes After Rotisserie Chickens?
By: Rick Stein, Vice President, Fresh Foods, Food Marketing Institute
As the Wall Street Journal recently reported, rotisserie chickens are the “gift to supermarkets that keeps on giving.” In today’s highly competitive environment, food retailers are in search of ways to differentiate and grow. Is foodservice the solution? As FMI’s 2017 Speaks study revealed many food retailers are looking to foodservice as at least part of the solution by planning to expand their space allocation, product offerings and labor allocation specifically for foodservice. But what could be the new “golden goose” for grocery stores that rotisserie chickens have been for the past 20 years?
Retail foodservice has experienced robust growth in recent years that many retailers hope to build upon. FMI’s Power of Foodservice at Retail, sponsored by Hussman and The Shelby Report, strives to provide insights as to how to capitalize on this potential opportunity for the industry. While the report provides a wealth of information about meal planning and execution, buying habits, purchase motivations and preferences, below you will find our top 10 insights.
- Focus on/optimize trip conversion. While shoppers visit the store multiple times/week, shoppers typically buy foodservice only once every 3 weeks. Cross-promote foodservice with center store and other fresh departments within the store.
- Strive to be top of mind. When in a rush or not in the mood to cook, retail foodservice is not on the radar of most shoppers. Retailers need to treat their foodservice as its own business and create “share of mind.”
- Maximize your share of market. One-half of shoppers purchase grocery deli prepared at outlets beyond their primary store. Increasing awareness of foodservice offerings will serve to keep current customers at their primary store with higher rings and margins.
- Leverage technology to improve awareness of foodservice as a viable restaurant alternative. Shoppers often use technology to help with meal plans. Making efforts to have retail foodservice appear with restaurant options will open shoppers’ eyes to this option.
- Connect with shoppers using technology. Most shoppers are willing to sign up to receive outreach about food service offerings, with email and text being the shopper-preferred methods.
- Provide options for speed-focused shoppers. These shoppers have interest in grab-and-go and heat-and-eat options, along with the ability to order ahead and dedicated foodservice checkout lanes.
- Provide options for nutrition-focused shoppers who deemphasize price and speed but value customization. Along with healthy options, transparency with respect to ingredients, quality and freshness are important to these shoppers.
- Enhanced in-store amenities to capture Millennials and urban shoppers. While less important than price, speed or nutrition, Millennials and urban shopper place high importance on amenities such as seating areas, free WiFi, table service, outside patios and even entertainment.
- Targeted investment in expanded variety matched to the core shopper can win over shoppers at mealtime. While consumers want more options, the options need to be matched to the core shopper. Customization is also important to many shoppers, particularly frequent foodservice shoppers.
- Consider meal kits along with made-to-order, self-serve buffets and grab-and-go to provide more time-saving solutions. Store-developed meal kits are a natural extension for foodservice.
