June 28, 2007
Safeway Opens a Restaurant
By Tom Ryan
Safeway Inc. has quietly opened its first freestanding restaurant behind its store in Redwood City, CA. Apparently, Citrine is designed to test recipes for the prepared food sections in Safeway’s stores, but it also appears eyed for possible expansion.
The French-themed “bistro” opened in early June without any advertising or publicity, and Safeway officials have divulged few details on the project.
“This is an experiment where we’ll have the opportunity to test some culinary ideas,” Brian Dowling, a Safeway spokesman, told the Contra Costa Times. “We never talk about experiments that are in this early stage.”
According to the newspaper, Citrine fits the “fast casual” category, where customers order from a counter for eat in or take out. The affiliation to Safeway is hidden, although it uses only products available through the chain’s distribution center.
Entrees
include Thai barbecue chicken, $12.49; margarita pizza, $8.99; and grilled
fish, $13.99; as well as soups, sandwiches and salads. Its modern décor features
blond wood accents along with a color palette of soft greens, oranges and yellows.
Large posters display photos of foreign places and quotes from historical figures
such as Galileo’s “Wine is sunlight held together by water.”
A website (www.citrinebistro.com) includes the bistro’s menu, its philosophy, key management bios, a “Dash & Dine” online ordering service, a Club Citrine loyalty card, as well as a Destinations pull-down tab – although only Redwood City is listed.
Some grocers include cafeteria-styled dining areas inside stores, but a separate restaurant is unusual. The closest example is perhaps Tastings, a fine-dining restaurant in Rochester, NY, operated by Wegmans.
With Safeway mum on details, some market watchers feel the concept is primarily intended to test recipes for prepared foods sections. Sushi, sandwiches and gourmet soups have been added to Safeway’s deli section as part of an overall remodeling effort in recent years to appeal to a more lifestyle-oriented customer.
“Having a restaurant allows you to get experience in [prepared foods],” Ted Taft, a retail consultant at Meridian Consulting, told the Contra Costa Times. “If Safeway just looks at Albertsons and other grocers as their competition, they are missing the fact that a larger share of the food dollar is going to restaurants.”
But expansion is possible. Employees at Citrine said they expect other sites to open and an ad on Craigslist tells jobseekers that “others are to follow” the Redwood City location.
Safeway’s Dowling said, “Whether or not it goes beyond this single unit, it’s too early to tell.”
Discussion Questions: What do you think of Safeway’s experimental restaurant? Do you think more grocers should be opening restaurants to serve as laboratories for prepared foods sections? Or do you think grocers should explore opening restaurants as marketing or even growth vehicles?
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Experimentation is good and there’s probably not enough of it going on at retail today.
A successful restaurant takes a huge commitment – to offer consumers what they want, to train associates properly, and to eventually make a profit. Who knows, a “testing lab” could more than pay for itself for Safeway and others.
If Citrine is just used for market research, it will be a winner. Safeway sales were $40 billion last year. The cost of 1 restaurant for research purposes isn’t significant compared to the learning value. And if Citrine makes a profit, it can be rolled out selectively. The only financial obstacle to a major restaurant rollout: it’s hard to compete in the restaurant business with supermarket union wage scales and benefits.
The availability of good tasting, nutritious, fresh food for eating in or taking home is an area in which grocery stores have been vulnerable for a long time. While the grocery stores have all the ingredients for making those dinners, preparation time has become an issue for a population concerned about convenience, health, and nutrition. Determining what tastes good to consumers and identifying what kind of food consumers want to purchase to take home and eat has been an area of concern as retailers and manufacturers try to find meal solutions. This is likely to be an area of increased competition with the introduction of Tesco in the southwest. Safeway is smart to experiment with alternatives.
Being a Northeasterner, I’m not really familiar with the specifics of the Safeway shopping experience. I think the restaurant concept can be successful if the retail store people keep a hands-off approach to managing the restaurant business. The only thing they should be concerned about is that the restaurant delivers an experience similar to the Safeway brand experience, whether that be flavor, design or any other number of factors.
Safeway is once again showing the industry just why it is an innovative leader. This brand has strategically evolved its in-store shopping experience to resonate with consumers in exciting new ways (an experiential lifestyle approach), and the opening of Citrine further extends the company’s commitment and desire to truly understand the current and emerging meal solutions desires of its customers.
This kind of depends on the definition of restaurant. Safeway says this is an experiment. Other grocers have already found this to be successful many years ago by putting them inside their stores. I recently ate at one of my clients’ stores that had two level seating, full salad bar, hot foods, and sandwiches made to order. I would consider that a restaurant.
Buehler’s in Ohio have full service restaurants right inside their stores and we all know how hugely successful they are. Ukrops in Virginia, I believe, offers something similar. Hy-Vee as well. Of course, this is a great idea but I have my doubts that a sterile chain store is going to be able to pull it off. The only ones I’ve seen successful are run by the brilliant, privately held, regional chains.
And when are people supposed to dine at the Safeway restaurant behind the store? Before they shop in the store, so that when they shop they will be too full to want to buy anything (especially profitable impulse items) or after they shop when the frozen food is defrosting in the car? I don’t think this idea was thought out.
It’s common knowledge that shoppers are always advised not to go food shopping when they are hungry – to avoid buying things they don’t need.
This seems like another example of Safeway (Steve Burd) thinking about internal objectives rather than consumers. Except in this case, they will be cannibalizing their own sales. If they really want a restaurant “to experiment” with, locate it away from the store so that the dining experience and the food shopping experience are not connected. However, I have to beg the question – unless you live in a place that doesn’t have good restaurants, will you really want to go to a restaurant that is a test kitchen for a supermarket?
In the past ten years, “open minded” supermarket executives have brought in restaurateurs to start a restaurant
concept and actual business for the chain. Examples are
Harris Teeter, Heinen’s, Publix, Dominick’s, to name a few. Some chains developed a central kitchen concept, your description of a lab restaurant, to prepare and test
market foods. Few, if any, chains have succeeded in running a central kitchen. One exception is Publix who prepares entrees to salads to turkey breast, and more.
From my working and marketing experience, three issues to overcome to be successful:
1) Need for a culture in the chain, and especially driven by the CEO or owner; 2) If a ‘pure’ restaurant is desired by the chain, a separate brand name and image must be created; 3) The development of an accurate cost structure and system has been enormously difficult, if not ever done.
The exception to all this is the old Dominick’s Fresh Stores that had small restaurants in the separate entrance, cafe and Starbucks space (separate from the regular grocery store). It was a store by store issue to be a Fresh Store, and the growth of carry-outs were enormous.
The other means to this meal offering issue, in chains, is
the in store kitchen and chef department. Kroger in Louisville has done a positive business in carry-outs, not
restaurant sit down eating. But, no brand name or image has been developed by Kroger!
The opportunity is there but culture, thinking like a restaurateur, and consumer marketing have never been combined for the ultimate, separate business for chains. Hmmmmmmmmmm!
I’m not sure this has anything to do with Tesco, but it’s a good possibility. The idea of a restaurant in their stores are nothing new; it has been done for years at many small and large grocery stores. Also Nordstrom does a pretty good job at their restaurants!
Will the restaurant job be classified as grocery, product, deli or maybe meat? Or will the hotel and restaurant union need to get involved? Whatever, those with chef’s coats aren’t cheap!
The main purpose of a supermarket is to provide food to feed people. Restaurants when well conceived and properly organized seem a natural extension of supermarkets, both inside the store and as part of an extended business-family. I have often thought I might someday see a chain of free-standing Wegman’s, Byerly’s, Krogers or Whole Foods restaurants. Maybe I will.
In addition to Wegman’s, Whole Foods now has at least three sit down eating areas in their new stores. Safeway knows that they have a very loyal core of “elite shoppers” that will embrace the restaurant.
In my opinion, this type of venture is a good “test and learn” opportunity. It has the potential to distract Senior Management from the larger challenge of becoming a viable alternative for the busy Mom looking to feed her family. I would rather see an expanded “Meals to Go” emphasis than an experiment like this one.
I believe Safeway is looking at Wegman’s as an example of what it could be as a true destination for food. It is a great aspiration to have as they have cluster customers and locations that will definitely embrace it. I don’t believe it will happen under the Safeway banner.
Good points above regarding Wegmans and Whole Foods. Many people do consider them restaurants. I certainly consider Whole Foods as a destination restaurant. Even a few natural food stores in my area now have sit down eating areas with prepared meals.
Somehow to me though, a restaurant featuring food from the plain vanilla sterile grocery chain just doesn’t sound very appealing. Wegmans, Whole Foods, Buehlers, Ukrops, etc, those are such a far step up in class compared to the national chains. Some of these stores even have cooking schools/classes which provides a great synergy. Maybe when Ruth’s Chris Steakhouse says they buy their fillets from Safeway, I will be a believer.
It’s a very nice looking building too. (The original article[s] in all of MediaNews’ fine Bay Area publications had an illustration.)
I guess this is one of those can’t-hurt-might-help things…unless, of course, it become a distraction from Safeway’s “core mission.” More telling, perhaps, is the apparent desire to disassociate from S: what exactly does that say?
(And this Wegman’s “fine dining” restaurant: THAT’s something I’d like to hear more about!)
Yep, Whole Foods, Wegmans.
Shows that Safeway is behind the curve but possibly a bit ahead of the others. But probably not. At least in urban stores such as in Portland’s downtown or at 5th and K Sts. NW in DC, Safeway could have but didn’t/isn’t putting this kind of use and other functions on the perimeter of the store in ways that open the store to the street–florist, coffee, prepared food, and produce are all visible from the street in Portland, but you have to go into the store.
No patio. Check out Fox & Obel’s in Chicago as a counter example. The Andronico’s with an outside patio in Walnut Creek, etc.
Urban stores at the very least should be treated differently than suburban stores.
It’s an incredibly wasted opportunity, especially given the difference in consumption levels between prepared and nonprepared foods, eating out-of-the-home vs. in-home.
I love the idea and have seen the concept. No chance it can scale across the chain but it’s a perfect idea to put into their ‘best lifestyle’ stores. Check out http://www.passyourplate.com and others. Consumers want even more experiential retail concepts, and this is but another example.
We believe that ‘traditional’ grocers, like Safeway, Kroger, Albertsons, etc., absolutely must innovate and then execute in order to fend off the squeeze from both the Whole Foods and Wal-Mart fronts. The new ventures taking place in this industry are not exercises in creativity as much as they are matters of survival of the fittest.
Safeway’s efforts, across the board, are clearly advanced in terms of customer experience, foodservice and now this; sub-branding.
They should be applauded and emulated for getting out there and making it happen. Clearly, when the smoke clears, they’ll still be a viable brand.
I was very interested to see this, as I find myself on business trips starting to stop at “grocery stores” for a fast, freshly made, delicious, inexpensive lunch when I would have previously stopped at a fast food or limited service restaurant.
Three very simple comments:
1. Absolutely. Grocers should be in the restaurant business.
2. The restaurant should be inside the store.
3. The grocer should also cook meat I buy in the store so I can take it home and assemble meals myself.
I doubt the Safeway customer is going to get as much out of it as Safeway is. With a stand-alone restaurant, Safeway will have a perfect vehicle to gain a tremendous amount of customer feedback which will help them to know how to merchandise items in their stores. My only hope is they don’t try to run this restaurant like an extension of their supply-chain process but rather run it as a true opportunity to gain customer insight. One of the most important things they could do is allow P&G to assist them in studying the restaurant customers. P&G is the best in terms of understanding the consumer and finding hidden value in their day-to-day actions.
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Experimentation is good and there’s probably not enough of it going on at retail today.
A successful restaurant takes a huge commitment – to offer consumers what they want, to train associates properly, and to eventually make a profit. Who knows, a “testing lab” could more than pay for itself for Safeway and others.
If Citrine is just used for market research, it will be a winner. Safeway sales were $40 billion last year. The cost of 1 restaurant for research purposes isn’t significant compared to the learning value. And if Citrine makes a profit, it can be rolled out selectively. The only financial obstacle to a major restaurant rollout: it’s hard to compete in the restaurant business with supermarket union wage scales and benefits.
The availability of good tasting, nutritious, fresh food for eating in or taking home is an area in which grocery stores have been vulnerable for a long time. While the grocery stores have all the ingredients for making those dinners, preparation time has become an issue for a population concerned about convenience, health, and nutrition. Determining what tastes good to consumers and identifying what kind of food consumers want to purchase to take home and eat has been an area of concern as retailers and manufacturers try to find meal solutions. This is likely to be an area of increased competition with the introduction of Tesco in the southwest. Safeway is smart to experiment with alternatives.
Being a Northeasterner, I’m not really familiar with the specifics of the Safeway shopping experience. I think the restaurant concept can be successful if the retail store people keep a hands-off approach to managing the restaurant business. The only thing they should be concerned about is that the restaurant delivers an experience similar to the Safeway brand experience, whether that be flavor, design or any other number of factors.
Safeway is once again showing the industry just why it is an innovative leader. This brand has strategically evolved its in-store shopping experience to resonate with consumers in exciting new ways (an experiential lifestyle approach), and the opening of Citrine further extends the company’s commitment and desire to truly understand the current and emerging meal solutions desires of its customers.
This kind of depends on the definition of restaurant. Safeway says this is an experiment. Other grocers have already found this to be successful many years ago by putting them inside their stores. I recently ate at one of my clients’ stores that had two level seating, full salad bar, hot foods, and sandwiches made to order. I would consider that a restaurant.
Buehler’s in Ohio have full service restaurants right inside their stores and we all know how hugely successful they are. Ukrops in Virginia, I believe, offers something similar. Hy-Vee as well. Of course, this is a great idea but I have my doubts that a sterile chain store is going to be able to pull it off. The only ones I’ve seen successful are run by the brilliant, privately held, regional chains.
And when are people supposed to dine at the Safeway restaurant behind the store? Before they shop in the store, so that when they shop they will be too full to want to buy anything (especially profitable impulse items) or after they shop when the frozen food is defrosting in the car? I don’t think this idea was thought out.
It’s common knowledge that shoppers are always advised not to go food shopping when they are hungry – to avoid buying things they don’t need.
This seems like another example of Safeway (Steve Burd) thinking about internal objectives rather than consumers. Except in this case, they will be cannibalizing their own sales. If they really want a restaurant “to experiment” with, locate it away from the store so that the dining experience and the food shopping experience are not connected. However, I have to beg the question – unless you live in a place that doesn’t have good restaurants, will you really want to go to a restaurant that is a test kitchen for a supermarket?
In the past ten years, “open minded” supermarket executives have brought in restaurateurs to start a restaurant
concept and actual business for the chain. Examples are
Harris Teeter, Heinen’s, Publix, Dominick’s, to name a few. Some chains developed a central kitchen concept, your description of a lab restaurant, to prepare and test
market foods. Few, if any, chains have succeeded in running a central kitchen. One exception is Publix who prepares entrees to salads to turkey breast, and more.
From my working and marketing experience, three issues to overcome to be successful:
1) Need for a culture in the chain, and especially driven by the CEO or owner; 2) If a ‘pure’ restaurant is desired by the chain, a separate brand name and image must be created; 3) The development of an accurate cost structure and system has been enormously difficult, if not ever done.
The exception to all this is the old Dominick’s Fresh Stores that had small restaurants in the separate entrance, cafe and Starbucks space (separate from the regular grocery store). It was a store by store issue to be a Fresh Store, and the growth of carry-outs were enormous.
The other means to this meal offering issue, in chains, is
the in store kitchen and chef department. Kroger in Louisville has done a positive business in carry-outs, not
restaurant sit down eating. But, no brand name or image has been developed by Kroger!
The opportunity is there but culture, thinking like a restaurateur, and consumer marketing have never been combined for the ultimate, separate business for chains. Hmmmmmmmmmm!
I’m not sure this has anything to do with Tesco, but it’s a good possibility. The idea of a restaurant in their stores are nothing new; it has been done for years at many small and large grocery stores. Also Nordstrom does a pretty good job at their restaurants!
Will the restaurant job be classified as grocery, product, deli or maybe meat? Or will the hotel and restaurant union need to get involved? Whatever, those with chef’s coats aren’t cheap!
The main purpose of a supermarket is to provide food to feed people. Restaurants when well conceived and properly organized seem a natural extension of supermarkets, both inside the store and as part of an extended business-family. I have often thought I might someday see a chain of free-standing Wegman’s, Byerly’s, Krogers or Whole Foods restaurants. Maybe I will.
In addition to Wegman’s, Whole Foods now has at least three sit down eating areas in their new stores. Safeway knows that they have a very loyal core of “elite shoppers” that will embrace the restaurant.
In my opinion, this type of venture is a good “test and learn” opportunity. It has the potential to distract Senior Management from the larger challenge of becoming a viable alternative for the busy Mom looking to feed her family. I would rather see an expanded “Meals to Go” emphasis than an experiment like this one.
I believe Safeway is looking at Wegman’s as an example of what it could be as a true destination for food. It is a great aspiration to have as they have cluster customers and locations that will definitely embrace it. I don’t believe it will happen under the Safeway banner.
Good points above regarding Wegmans and Whole Foods. Many people do consider them restaurants. I certainly consider Whole Foods as a destination restaurant. Even a few natural food stores in my area now have sit down eating areas with prepared meals.
Somehow to me though, a restaurant featuring food from the plain vanilla sterile grocery chain just doesn’t sound very appealing. Wegmans, Whole Foods, Buehlers, Ukrops, etc, those are such a far step up in class compared to the national chains. Some of these stores even have cooking schools/classes which provides a great synergy. Maybe when Ruth’s Chris Steakhouse says they buy their fillets from Safeway, I will be a believer.
It’s a very nice looking building too. (The original article[s] in all of MediaNews’ fine Bay Area publications had an illustration.)
I guess this is one of those can’t-hurt-might-help things…unless, of course, it become a distraction from Safeway’s “core mission.” More telling, perhaps, is the apparent desire to disassociate from S: what exactly does that say?
(And this Wegman’s “fine dining” restaurant: THAT’s something I’d like to hear more about!)
Yep, Whole Foods, Wegmans.
Shows that Safeway is behind the curve but possibly a bit ahead of the others. But probably not. At least in urban stores such as in Portland’s downtown or at 5th and K Sts. NW in DC, Safeway could have but didn’t/isn’t putting this kind of use and other functions on the perimeter of the store in ways that open the store to the street–florist, coffee, prepared food, and produce are all visible from the street in Portland, but you have to go into the store.
No patio. Check out Fox & Obel’s in Chicago as a counter example. The Andronico’s with an outside patio in Walnut Creek, etc.
Urban stores at the very least should be treated differently than suburban stores.
It’s an incredibly wasted opportunity, especially given the difference in consumption levels between prepared and nonprepared foods, eating out-of-the-home vs. in-home.
I love the idea and have seen the concept. No chance it can scale across the chain but it’s a perfect idea to put into their ‘best lifestyle’ stores. Check out http://www.passyourplate.com and others. Consumers want even more experiential retail concepts, and this is but another example.
We believe that ‘traditional’ grocers, like Safeway, Kroger, Albertsons, etc., absolutely must innovate and then execute in order to fend off the squeeze from both the Whole Foods and Wal-Mart fronts. The new ventures taking place in this industry are not exercises in creativity as much as they are matters of survival of the fittest.
Safeway’s efforts, across the board, are clearly advanced in terms of customer experience, foodservice and now this; sub-branding.
They should be applauded and emulated for getting out there and making it happen. Clearly, when the smoke clears, they’ll still be a viable brand.
I was very interested to see this, as I find myself on business trips starting to stop at “grocery stores” for a fast, freshly made, delicious, inexpensive lunch when I would have previously stopped at a fast food or limited service restaurant.
Three very simple comments:
1. Absolutely. Grocers should be in the restaurant business.
2. The restaurant should be inside the store.
3. The grocer should also cook meat I buy in the store so I can take it home and assemble meals myself.
I doubt the Safeway customer is going to get as much out of it as Safeway is. With a stand-alone restaurant, Safeway will have a perfect vehicle to gain a tremendous amount of customer feedback which will help them to know how to merchandise items in their stores. My only hope is they don’t try to run this restaurant like an extension of their supply-chain process but rather run it as a true opportunity to gain customer insight. One of the most important things they could do is allow P&G to assist them in studying the restaurant customers. P&G is the best in terms of understanding the consumer and finding hidden value in their day-to-day actions.