Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Supermarkets face falling market share
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- Figure 1: MULO sales of food and drink, by retail channel, 2012 and 2017
- Foodservice can only do so much for grocers
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- Figure 2: Reasons for choosing primary grocery retailer, August 2015
- Grocers can’t replace restaurants
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- Figure 3: Foodservice in retail attitudes, by HH income, August 2017
- The opportunities
- Millennials are the target market for foodservice in retail concepts
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- Figure 4: Foodservice in retail attitudes, by generation, August 2017
- Foodservice offerings can bring in non-loyalists
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- Figure 5: Concept interest, by segment shoppers, August 2017
- Drive trial with samples and specials
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- Figure 6: Foodservice in retail purchase motivators, August 2017
- What it means
The Market – What You Need to Know
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- Supermarkets need to stay competitive
- Competition comes from all sides
- Behavioral changes make the case for foodservice in retail
Market Breakdown
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- Supermarkets are slowly losing market share to competitors
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- Figure 7: MULO sales of food and drink, by retail channel, 2012 and 2017
Market Perspective
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- Meal kits threaten both foodservice and retail
- Dollar stores and discount grocers encroach on competitor’s market share
- C-stores, the original foodservice in retail
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- Figure 8: Total US convenience store foodservice sales, at current prices, by segment, 2011-21
- Buying online in a digital world
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- Figure 9: Online shopping attitudes and behaviors, August 2017
Market Factors
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- Supermarket and restaurant sales are neck-in-neck
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- Figure 10: Food sales at home and away from home, January 2003-April 2017
- Millennials shop around
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- Figure 11: Number of stores shopped for groceries, by demographics, August 2016
- Rockin’ the suburbs
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- Figure 12: Net migration, by type of area, 2005-06 through 2015-16
- Labeling laws further delayed
Key Players – What You Need to Know
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- Grocers tackle foodservice
- Prepared foods are nice to have, not need to have
- Stores become restaurant destinations
What’s Working?
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- Foodservice becomes the norm at supermarkets
- Hy-Vee
- Mariano’s
- Wegman’s
- Lowe’s Foods
- Kroger
- Mass merchandisers upgrade their foodservice programs
- Walmart moves beyond traditional QSRs
- Can foodservice be Target’s niche?
- Whole Foods lays down the template for foodservice programs
- Grocery bars are a new opportunity for alcohol brands
What’s Struggling?
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- Foodservice alone couldn’t save Whole Foods
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- Figure 13: Price of Whole Foods stock, 9/3/2012-8/21/2017
- Consumers choose stores based on convenience and price
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- Figure 14: Reasons for choosing primary grocery retailer, August 2015
- Dollar stores and discount grocers thrive despite lack of foodservice programs
- Food safety issues arise
What’s Next?
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- Smaller stores, larger foodservice offerings
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- Figure 15: TeaBot at 365
- Figure 16: Tablet ordering at 365
- Technology makes its way into the prepared foods section
- Grocers keep up with the trends
- Food halls completely blur the lines between retail and foodservice
- Restaurants become an opportunity for non-grocery retailers/CPG brands
The Consumer – What You Need to Know
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- Younger consumers drive interest in grocer foodservice programs
- Attract non-loyalists with foodservice
- Not as fun as a restaurant
- Provide diners with comfort and privacy
- Spur sales with samples and specials
Foodservice in Retail Purchases
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- Prepared chicken dishes are a household favorite
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- Figure 17: Foodservice in retail purchases, August 2017
- Men purchase ready-to-eat options
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- Figure 18: Foodservice in retail purchases, by gender, August 2017
- Millennials are the target market
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- Figure 19: Foodservice in retail purchases, by age, August 2017
- Affluent consumers are more likely to buy prepared dishes
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- Figure 20: Foodservice in retail purchases, by age and HH income, August 2017
- Foodservice purchases highest in Northeast, lowest in Midwest
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- Figure 21: Foodservice in retail purchases, by region, August 2017
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- Figure 22: Foodservice in retail purchases, by area, August 2017
- Parents look for convenient prepared options
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- Figure 23: Foodservice in retail purchases, by parental status and age, August 2017
- Natural grocer consumers are most likely to buy prepared options
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- Figure 24: Foodservice in retail purchases, by segment shoppers, August 2017
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- Figure 25: Foodservice in retail purchases, by segment shoppers (loyalists), August 2017
Foodservice in Retail Concept Interest
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- A third of consumers are not interested in any foodservice concept
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- Figure 26: Concept interest, August 2017
- TURF analysis: Foodservice concept interest
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- Figure 27: TURF analysis – Store concept interest, August 2017
- Foodservice options appeal to iGens/Millennials
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- Figure 28: Concept interest, by generation, August 2017
- Men prefer QSRs while women want coffee shops
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- Figure 29: Concept interest, by gender and age, August 2017
- Those in the Northeast are open to grocery FSRs
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- Figure 30: Concept interest, by region, August 2017
- Foodservice options helps grocers appeal to non-loyalists
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- Figure 31: Concept interest, by segment shoppers, August 2017
- In their own words: Ideal foodservice in retail concept
Consumption Location
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- Most prepared options are consumed at home
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- Figure 32: Consumption location, August 2017
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- Figure 33: Mariano’s email, August 13, 2017 “New Loadable Lunch & Dinner Menu: Prime Rib Meal, Buffalo Rotisserie Chicken Salad, Cubano Panini and more”
- Millennials are most likely to eat options AFH
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- Figure 34: Consumption location, by age, August 2017
Foodservice in Retail Attitudes
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- Consumers value the convenience of foodservice in retail
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- Figure 35: Foodservice in retail attitudes, August 2017
- Younger men are the grocery bar drinkers
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- Figure 36: Foodservice in retail attitudes, by gender and age, August 2017
- Fun for all ages
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- Figure 37: Foodservice in retail attitudes, by generation, August 2017
- Urban parents are most likely to enjoy foodservice programs
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- Figure 38: Foodservice in retail attitudes, by parental status and age, August 2017
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- Figure 39: Foodservice in retail attitudes, CHAID output, August 2017
- Natural grocer consumers are most enthusiastic about foodservice in retail
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- Figure 40: Foodservice in retail attitudes, by segment shoppers, August 2017
Retail Versus Foodservice Associations
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- Methodology
- Consumers think of retail foodservice foods as fresh and healthy
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- Figure 41: Retail and foodservice associations, August 2017
Purchase Motivators
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- Samples and specials may drive sales
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- Figure 42: Retail in foodservice purchase motivators, August 2017
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- Figure 43: Hy-Vee, August 1, 2017 “Pick up dinner tonight”
- Motivate female customers with samples and selection
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- Figure 44: Retail in foodservice purchase motivators, by gender, August 2017
- Boomers may prove to be an elusive target
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- Figure 45: Retail in foodservice purchase motivators, by generation, August 2017
- Loyalists aren’t that interested in trying foodservice options
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- Figure 46: Retail in foodservice purchase motivators, by segment shoppers, August 2017
- A great in-store experience motivates urbanites
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- Figure 47: Retail in foodservice purchase motivators, by area, August 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
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