C-stores, retail wrestle for slice of foodservice pie

ShareThis         Resize text       

 0 Comments

11/21/2014 09:37:00 AM
Tim York

Tim York, Markon CooperativeCompetition for the foodservice dollar is ramping up as the economy recovers slowly but surely from its downturn in 2008.

But consumers aren’t necessarily beating a path back to their favorite restaurants to celebrate.

While the down economy lured shoppers back to the grocery store, retailers seized the opportunity to ramp up meal options requiring little or no preparation. Convenience stores and other non-traditional foodservice outlets also saw opportunity to grab space.

There’s a blurring like never before between the foodservice and retail landscape.

A recent Technomic study found more than one-third (37%) of consumers say they purchase ready-to-eat foods from a supermarket or retail store weekly or more often.

At Whole Foods in Austin, Texas, patrons can choose from six concepts — from sushi to pasta — at a single location. What’s more, the prepared food section of many Whole Foods stores is located toward the front of the store in eating areas strategically located to lure in those passing by.

The placement of prepared foods reminds would-be restaurant goers there are options — ones that may align more closely with their desires for fresh, healthy, local and organic fare.

Across town at Central Market, diners can purchase “dinners for two,” which tout “a restaurant-quality, chef-prepared dinner ... when you don’t have time to cook, but do have time to swing by your store.”

Recent seasonal offerings include grilled salmon with tomatillo avocado sauce with a southwest vegetable saute, and herb grilled chicken with antipasto grilled vegetables.

These “fresh format stores” aren’t going away.

According to a 2014 Willard Bishop study, fresh format stores (e.g., Whole Foods and other organic grocers) will have a 92% increase in sales between 2013-18, with a projected 63% increase in store count over the same period.

Convenience stores are also upping the ante, recognizing they too are competing with quick-service restaurants, fast food chains and traditional grocery stores.

According to a 2013 foodservice study conducted by Convenience Store News, almost two-thirds of C-store operators expect their foodservice sales to increase.

Prepared food purchased at C-stores and other retail locations and eaten at home has grown 12% since 2006, and is projected to grow at more than twice the pace of the restaurant industry overall, according to market research firm The NPD Group.