The growth of the grocerant
Walk into a grocery store in the US today and you might find an oyster or sushi bar an on-site coffee shop or even a full-service restaurant. Known as ‘grocerants’, these supermarket-restaurant hybrids appeal to a population that values convenience and affordability above all else.
At the same time, the blurring line between retail and foodservice is helping supermarkets remain competitive in a shifting retail landscape.
According to market research firm NPD Group, grocerants generated 2.35 billion visits in the US in the year ending June 2018, while Mintel has found that two in five consumers are more likely to shop at a store that offers an experience.
Sandwich stations and coffee shops are the most appealing concepts to consumers, according to Mintel, while around one in five are interested in a full-service sit-down restaurant and 10% would like to see a bar at their local grocers.
“We expect interest to grow as these concepts become more mainstream,” wrote Amanda Topper, the company’s associate director of foodservice research, in an article on the future of foodservice in retail.
Despite the overall weakness in the U.S. restaurant industry, foodservice delivery sales grew by 20% over the last five years, according to The NPD Group.
“Delivery has become a need to have and no longer a nice to have in the restaurant industry,” said Warren Solochek, senior vice president, industry relations. “Restaurants need delivery in today’s environment in order to gain and maintain share. It has become a consumer expectation.”
“Convenience is among the chief reasons why consumers visit restaurants and delivery brings a heightened level of it,” Solochek added. “We forecast that delivery will grow over the next five years and the growth will source to non-traditional delivery outlets and dayparts.”
According to foodservice research firm Technomic, one of the key trends for 2019 will be a shift to more plant-based dining, which will not only mean swapping meat for veggies on menus but also plastic for compostable packaging.
“Restaurant companies are banning plastic straws in an eco-friendly push to eliminate waste and pollution, and operators are making compostable, plant-based food packaging a priority,” the company said.
Industry players that are already shifting to compostable packaging include natural fast food chain LEON, fast fine Greek group Souvla and delivery company Just Eat.
Technology amenities, from drone delivery to app-based checkout services, are redefining convenience and putting ‘frictionless’ foodservice front and center, according to Technomic.
Plus, the rollout of the Amazon Go retail store, where no check-out is required and consumers can choose from sandwiches, salads and bowls prepared at an on-site kitchen, could mark the beginning of a new iteration of ‘grab and go’.
The question, Technomic believes, is what lasting impact will all this technology have on customer experiences and person-to-person interaction?
“Are brands poised to suffer in an environment where staff may no longer be the communicator of its identity?” the company asked in its 2019 trend prediction. “Restaurant companies committed to both tech-enabled convenience and the personal touch will be working to strike a balance between the two.”