Grocers hit restaurants in the gut with hot bars
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
With many relying on basic $5 or $6 meals such as chicken, a scoop of mashed potatoes and green beans to drive prepared foods sales, grocers aren’t doing enough to take share from restaurants.
That’s according to Bob Sewall, EVP at Blount Fine Foods, and it’s especially true if grocers want to attract Millennials.
“Millennials may go to the deli four times a week to pick up a meal for the family, generally a hot-to-go meal with a protein and a side or two,” said Mr. Sewall. “But if you want to grow sales, you have to elevate the dining experience.”
Grocers should “make eclectic and interesting” to-go options with premium offerings and quality sauces “like you’d find in a white tablecloth restaurant,” according to Mr. Sewall.
Emphasizing healthy offerings and using clean label product — organic, gluten-free, low-sodium, low-calories, non-GMO, etc. — is as beneficial in the prepared foods section as elsewhere in the store. But if it’s not called out with signage “you won’t reap the benefits,” notes Mr. Sewall.
More important aspects are reliability, variety and offering consumers items they wouldn’t make at home or generally find elsewhere.
“If I’m with a co-worker at lunchtime, do I go to Johnny’s Restaurant, or to a supermarket that is constantly innovating — where I can find a hot bar, soup, a cold bar and sushi?,” said Mr. Sewall. “If all that’s available in a supermarket, and my time is limited for lunch, guess where I’m going?”
The extra step that’s rarely done by grocers is cross-merchandising or driving sales to other parts of the store where the product is available. Studying meal kit packages and restaurant-combo offerings should offer some ideas.
“And by the way, you shouldn’t even be thinking about whether there’s risk of cannibalization between different parts of the store” said Mr. Sewall. “If you’re going to sell premium creamed spinach, sell it in the hot bar, as a packaged side and behind glass. Shoppers will try the product in one location and then graduate to buying it in other departments. Let them all help each other grow.”
DISCUSSION QUESTIONS: Do you agree that a significant upgrade in prepared food offerings would pay off for grocers? Has cross-merchandising to other departments been a lost opportunity?