Photo: H-E-B
Can grocers help sit-down restaurants stay afloat with to-go meal programs?
Last Thursday, SpartanNash launched a “Restaurant Meals To Go” program that brings heat-and-eat meals from eight West Michigan restaurants to its store aisles. H-E-B and Rouses Markets previously introduced similar programs supporting a foodservice sector devastated by the pandemic.
In all cases, proceeds go to restaurants.
On a YouTube video, Dan Estelle, director meat and seafood, SpartanNash, said the grocer’s more than 100-year legacy involves helping local farmers, businesses and nonprofits in times of need and “this was obvious an extension of that.”
The SpartanNash program builds on a shift by restaurants to take-out and delivery amid social distancing mandates. The program also helps introduce the restaurants to a wider audience.
The participating restaurants each provide one to five items for offer by select SpartanNash banners. A challenge for restaurants is coming up with items that hold up well if not eaten immediately and dealing with the requirement of retail storage and packaging. SpartanNash’s quality assurance, food safety, labeling and merchandising teams were all involved in bringing the to-go items to stores.
Dave Ringler, director of happiness at German Bavarian-themed Cedar Springs Brewing Company, said his team focused on items that would “travel well, be relatively easy to prepare and still really taste great.”
H-E-B’s program was launched in early April and now supports 16 restaurants in Austin, Houston and San Antonio.
Meals from restaurants across Louisiana can be found in Rouses’ 72 locations. Also, of the 700 new hires Rouses has made to support increased in-store demand due to COVID-19, 260 previously worked at local restaurants. CEO Donny Rouse told Fox News, “Everyone in the restaurant industry loves food, and we love food. It’s a great fit and our customers can see that.”
A national survey conducted by the National Restaurant Association from April 10 and April 16 found that the U.S. restaurant industry has lost two-thirds of its workforce — more than eight million employees — as a result of COVID-19 closures. Many restaurants have abruptly closed their doors and others are struggling to adjust to a to-go model. Continued social distancing guidelines and diner apprehension will limit restaurants’ ability to recover as they are allowed to reopen.
- Restaurant meals to go – SpartanNash
- H-E-B launches program to support Texas restaurants – H-E-B
- Rouses Markets Helps Louisiana Restaurants Find New Ways To Sell – Rouses Markets
- Louisiana grocery store offers jobs, hope to community during coronavirus – Fox News
- Restaurants on track to lose $80 billion in sales by end of April; 8 million employees out of work – National Restaurant Association
- National Restaurant Association issues guidance for restaurants readying to reopen – National Restaurant Association
Discussion Questions
DISCUSSION QUESTIONS: In addition to bringing restaurant to-go meals to their selling floors, how might grocers help support local restaurants capsized by COVID-19? In what ways might the restaurant industry face a more uphill recovery battle than grocery?
Poll
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
Jeff Hall
President, Second To None
It is a win-win. Grocery stores present an attractive sales and distribution channel. The challenge is packaging and logistics. Retailers have much to win with new types of customers that can come in and buy more. They are also in the best position to run attractive promotions, tasting events (once restrictions are lifted) and much more. This is one such synergy that always made sense, but never took off in a big way before COVID-19.
H-E-B was the first retailer to do this across its trade area. This was a great idea as it kept restaurant employees working and it allowed customers who frequent those restaurants to buy while shopping for weekly groceries. It is a great idea that has been duplicated across many grocery chains in the country.
This is a great initiative! A lot of consumers miss eating out and are tired of having to make meals at home. At the same time, most supermarkets in the U.S. are lacking a really credible readymade meal offering. This idea bridges the gap between the two. The local aspect will no doubt be appreciated by consumers as well.
This is a terrific idea that should have value after the pandemic is in the rearview mirror. For retailers it gives them chef-prepared meals. For restaurants it is a critical outlet, not only now, but also in a normal environment. Plus, it has moved restaurants into re-engineering meals to go and finding the appropriate packaging for them. Perhaps the days of white styrofoam are numbered. For customers who normally don’t know what they’re going to eat for dinner on most days, these meals offer both quality and convenience.
Going forward, I envision these partnerships profitability expanding by sharing in the proceeds, cross promoting, developing signature items, etc. This is one idea where everyone wins – restaurants, grocers and consumers!
Hiring unemployed restaurant workers and selling meals from local restaurants are both great ways for grocers to support people and restaurant companies impacted by the COVID-19 restrictions on restaurants. Many grocery stores have collaborated with restaurants in the past with meals to go and small restaurants within the grocery store. Some grocery stores that are currently partnering with restaurants on to-go meals may continue this practice after the pandemic if they see that it is well received by customers, or they may opt to charge restaurants a percentage of sales to make a return on shelf space.
The restaurant industry faces greater challenges than grocery and many other businesses, as customers are in close proximity and interact closely with servers and touching things (silverware, dishes, etc.). We have all seen the study that shows how one person with the coronavirus can spread it to nine other people in a restaurant.
This initiative by SpartanNash is a perfect example of a values-driven brand leading with empathy. Customers are intently observing how companies are behaving in the COVID-19 crisis environment, especially looking at how they’re helping others. Offering local restaurant meal options is a triple win: it directly supports an industry most impacted by this crisis, it offers grocery customers new meal options from familiar local restaurants and it builds lasting good will. Hopefully this concept will continue to be embraced by more grocery brands in both the short and long term.
A great adaptation for the short term — questionable benefits for the restaurants in the long term. For whatever period the pandemic significantly changes consumers’ appetite for dining out, both parties win. The social aspect of sit-down dining is extremely important for most frequent diners. That would indicate a speedy return of the take-out business to on-site dining and a loss of this business for grocers when restrictions ease. But it is possible that the food itself becomes the driver in a post-COVID-19 environment. Then the restaurants are left with in-store sales, and they eventually become a “ghost kitchen” for the grocers. That won’t bring restaurant serving staff back to work. And the value of the restaurant brand will slowly disappear. I don’t believe that will happen and as a lover of great restaurants hope it doesn’t. But as a consultant evaluating strategy, you have to acknowledge the possibility. Ugh.
Crises can bring out the best in people, this type of cooperation is an uplifting example of that positive spirit. It replaces brutal competition of a zero sum game with community-based win-win actions aimed at maintaining the health and integrity of the local community.
Most restaurants were never opened to run at 50 percent capacity or to do take out and delivery only. Therefore, as some states start to allow restaurants to open while complying with social distancing, restaurant owners have to decide if it is worth it financially to open. Restaurants have a much bigger uphill battle than grocery.
It’s smart of grocers to carry restaurant meals, and the reasons aren’t all about altruism. Stir-crazy shut-ins would love a restaurant meal to break the tedium and give them something to look forward to. Our formerly-bustling local Tex-Mex joint has opened for carryout (including margaritas!) but if their food were available at the grocery store they would sell even more, and shoppers would pick up a bunch of other items at the same time.
The community-based grocery and restaurant collaboration is such a welcome development. We are witnessing companies such as SpartanNash acting as the intermediary between groceries and local restaurants in this crisis, and there are winners all around in this scenario. The restaurants are able to run their operations, bring some of their employees back, and via SpartaNash and partnerships between local grocers, they can share their famous dishes and help to provide some comfort during our quarantine life.
The grocery store operating model of the future will be centered around the customer experience. Prepared foods have already emerged as a major force in the grocery space. Collaborating with local restaurants is a natural progression in this movement. This is a win-win-win-win, for the grocery stores, restaurants, the third-party solution provider SpartanNash and, most importantly, the customers — who get to enjoy their favorite dishes in the comfort of their home.
I am sure this is a great way of helping restaurants survive but it does bring with it a few concerns. Restaurants have to maintain the quality and standards they set in their locations – they can still control the creation of the food but not the cooking so their brand could suffer. For the retailer, there is a huge difference between creating enough product to serve in a restaurant and enough product to sell in a store. Is this going to create disappointment if the stores have something one day and not the next? There is also the question of temperature control through the supply chain. Restaurants are not factories and do not have temperature control distribution because they do not need it. If the control is poor both the quality and safety suffers.
Great idea but it will take a lot of managing and planning to make this a workable solution on a larger scale.
This is awesome, a win-win for so many parties. Grocers have struggled to keep up with demand as the home meal count increases, so it helps there. As for consumers they get their favorite eat-out meal at home and it provides a form of financial lifeline for restaurants. For grocers who focus their overall value proposition on serving the overall community this is a great value-add that demonstrates this. No one yet knows how things will look for restaurants going forward – what social distance regulations will mean to seating capacity or how consumers will react to the prospect of eating out. This approach moving forward could be a great way to open a new channel for restaurants to sell their food.
Overall I feel this is an acceleration of the retail ecosystem concept whereby different organizations collaborate in order to do business together providing a one-stop shop for the consumer.
We’re going to see in the coming weeks an uptick in demand for variety. The novelty of homemade sourdough is going to fade.
Grocers carrying local restaurant meals makes a lot of sense. While the logistics and packaging issues are different from a take-and-bake pizza or the like, it seems the operational part of the equation is where retailers can step up. This could reduce the number of trips customers take out of the house and alleviate the need for each restaurant to figure out online ordering and pick up.
This gives retailers more differentiating points, restaurants more volume and consumers more choices.
This is about partnership. Helping each other. When we make it to the other side of COVID-19, you’ll see people having a renewed sense of support for their fellow humans and businesses. We are finding ways of supporting each other and other businesses that we never thought about. Some of this will be short-term and some will stick. Regardless, it’s all good.
Kudos for SpartanNash for helping bring this partnership to fruition. This is a synergistic arrangement benefiting hyper-local businesses that doesn’t come off as tone-deaf as the Hy-Vee/DSW partnership amid this crisis. Other opportunities for grocers to support local restaurants include employing laid-off restaurant workers to assist with short-term areas of hiring needs such as after-shift restocking, grocery deliveries, and curbside delivery. Given the simple fact that most restaurants are built on the concept of sit-down meals and social settings, restaurants will absolutely have a tougher road to recovery as socially starved customers will soon start to dip their forks and pocketbooks back into crowded venues. Because of both distancing requirements and public uneasiness, it may be quite awhile before tables and reservations are full to capacity and at pre-pandemic levels. Another reason the partnership outlined in this article is a welcome read.
This is just another example of selfless innovation that serves the shopper. Of course, there is some level of competition in this partnership that takes away potential revenue from the grocer, however the partnership can be constructed to help ensure that all parties involved reap benefits.
The two key ways have already been mentioned:
I must be missing something here, but how can we possibly compare the future of the two? Under the worst case scenario, the restaurant industry — at least sit down dining — is facing an existential crisis … literally (and how often can we use that word literally?). Even under better scenarios it’s massive disruption. Grocery OTOH, is doing more business than it can handle; and to the extent that people eat at home rather than out, that looks to continue. The only danger I see are meddlesome people urging conversion of all the stores to online.
Even in the “before times” in the Twin Cities we were seeing dining room staff being laid off due to the surge of DoorDash and similar delivery services — the restaurants were moving a similar amount of food but front-of-house was suffering. This doesn’t bring servers back in the short term, and marketing/getting distribution thru grocery will continue to be issues, but it may be a more-profitable-than-delivery solution for many restaurants.
This is a great partnership that will help restaurants. More than 8 million restaurant employees have been laid off or furloughed since the beginning of the coronavirus outbreak. So maybe this partnership could work both ways. In Germany, Aldi Sud and Aldi Nord made a staff-sharing deal with McDonald’s. Workers from the burger chain are being redeployed to work in the grocery stores during the pandemic. Stores need help, too.