October/November, 2017

From the Editor

Millennials Fuel Sit-down Meals At Supermarkets

If you can’t beat them, join them — what else is there to derive from Kroger’s’ announcement that it will open its first restaurant, Kitchen 1883 — named after the year Kroger was launched by Barney Kroger — and that Hy-Vee would become the largest franchisee of Wahlburgers, the chain developed by actor Mark Wahlberg and his family. These announcements follow the blossoming of the trend toward the so-called “Grocerant” — combining grocery and restaurants.

Eater, the Vox Media-owned website devoted mostly to dining trends and restaurant openings in major cities, recently ran a piece titled, “The Rise of the Grocerant” and subtitled, “How the local supermarket became your new favorite restaurant.”  The piece opened with important insight:

While sitting in the food hall section of New York City’s newest Whole Foods location, Natasha Beylis points out that most of the other people eating lunch in the packed space don’t have shopping bags. Like her, many have come to the supermarket solely to dine in.

The article points out data that is confirming this interesting trend:

Revenue for prepared foodservice at supermarkets grew an average of 10 percent a year from 2005 to 2015, according to Technomic Inc., a research and consulting firm. And when dining out, more consumers are choosing their local grocery storesover traditional fast food and restaurants, the firm showed.

Of course, prepared foods and in-store foodservice are nothing new. These have been around for decades, but now these foodservice offerings are the actual draw.

It is not grocery shoppers sitting down for a bite; it is the foodservice option drawing consumers to the venue, and those consumers often leave without shopping at all. As the article continues:

Essentially, the grab-and-go salad bars and prepared foods counters are evolving and looking more like fast-casual restaurant spaces, designed to keep shoppers in the store. Some offer massive food court seating areas with booths and dark, cozy atmospheres, while others feature enclosed full-service spaces.

They often include free Wi-Fi, bars, host stations, even menus for made-to-order meals. They are designed to encourage customers to linger, as a restaurant or comfortable coffee shop might. And this is what consumers will likely see more and more in their local markets.

The piece goes on to explain that, although some of this is high end urban fair — Mario Batali’s and Lidia Bastianich’s Eataly is a prime example — this movement is not solely an upscale phenomenon.

But for people in less congested communities, the grocerant experience has become more of the normand isn’t as stuffy. The Midwest-based Hy-Vee grocery chain has incorporated Hy-Vee Grille, a full-service restaurant, into dozens of its locations since 2012.

The driver seems to be changing consumer expectations:

This trend is largely driven by millennials, experts say. Forty years ago, baby boomers purchased food from grocery stores. Today, those places are competing with farmers markets, apps, home delivery, websites, and other options. Still, the concept of a “retail meal” is nothing new. Malls and department stores like Macy’s have had food courts for years. Then there is IKEA and its famous meatballs and cafeteria. Either in spite of or because of this progression, millennials have developed higher expectations for prepared foods at supermarkets.

According to a recent Technomic survey, 52 percent of respondents said they see prepared foods as healthier alternatives to fast food. Meanwhile, a study by the NPD Group, which researches consumer behavior, showed that consumers rate prepared food higher in freshness and quality, turning to standard quick-service for affordability and convenience.

Although a local spin on many of these concepts is de rigueur, there is one unifying concept:

While specific experiences may differ at grocerants, one thing most of them do have in common is booze. Alcohol plays a major rolein the grocerant concept…

But happy hours, chef partnerships, and food courts might be just the beginning of the grocerant takeover. Supermarkets like Whole Foods are pushing the boundaries to keep communities and young shoppers engaged with their brands. And competition between grocery chains will only drive more experimentation.

The supermarket deli has evolved from a vendor of sliced meats and cheeses into a vendor of prepared foods and in-store eating service for store customers to a concept that is expected to draw consumers and build the brand while building the bottom line.              db