Retail format adding more foodservice offerings
Retail format adding more foodservice offerings
SAN DIEGO -- One of the faster-growing employment opportunities for professional chefs is a supermarket, according to Jennifer Gallagher, a professor at the culinary-focused Johnson & Wales University in Charlotte, NC.
Speaking at a workshop session here at the Produce Marketing Association Fresh Summit convention concerning the blending of the retail and foodservice sectors, Ms. Gallagher said that the addition of supermarkets as a potential employer is fortuitous for her profession as more and more young people are choosing that occupation. These future chefs come into the university hoping to emerge as Food Network stars and not interested in working long hours at a restaurant. While a supermarket will not likely offer them stardom, it does offer hours that are more regular and a different environment than the typical restaurant.
Kevin Coupe, who bills himself as The Content Guy, set the stage for the discussion as he talked about various consumer trends. The consumer -- especially those younger than Baby Boomers -- are not loyal to the traditional supermarket format, so retailers should not be either. And retailers are catching on to this phenomenon, according to both Ms. Gallagher and Mr. Coupe.
"The Content Guy" said that the content of supermarkets has changed dramatically in recent years with more and more retailers including ready- made food as part of their businesses. The newer stores are devoting less and less space to "center aisle" and more to the periphery, which typically includes expanding the deli and ready-made food departments.
Ms. Gallagher discussed a local independent retailer that has seen its in-store foodservice sales grow at a phenomenal 125 percent clip over the past year. She said that currently about 40 percent of the store's floor space is devoted to the foodservice category.
Mr. Coupe said that store formats are constantly changing and that there is a general blurring of traditional formats. Home Depot, he said, is testing a convenience store format on some of its properties, and Europe's largest retailer -- Tesco -- is planning to open 200 convenience stores in Los Angeles and Phoenix over the next several years. Mr. Coupe said that these stores are being called "convenience stores," but Tesco is sure to explore new territory with its convenience concept. Those stores are expected to be very heavy in ready-made foods. To compete, traditional retailers have to follow suit ... or lead the way in their own markets.
Mr. Coupe said that the younger generations are multi-taskers who love to do five things at once. He said that this does not bode well for the future of the supermarket experience, which he called one of the most linear experiences one can have. He argued that Millennials are not ever going to be interested in walking up and down a grocery store aisle as their parents do. Already, he said, Amazon.com offers 14,000 SKUs of food. He said that retailers must satisfy the needs of their customers, whether those needs fit into their current format or not. Change or perish, seemed to be Mr. Coupe's battle cry.
Ms. Gallagher cautioned retailers against getting involved in foodservice offerings unless they make a total commitment to do it right. And doing it right, according to this teacher of future chefs, is to hire trained professionals. She said that a supermarket does not have to offer a wide variety of items, but it does have to make sure that what it does it does well or the consumer is not going to buy it.
Both speakers said that a well-developed in-supermarket foodservice operation can work hand in hand with the other departments - including produce - to reduce or completely eliminate shrink. Items that do not sell or are nearing the end of their shelf life can be switched to deli and used in a prepared food manner.
Mr. Coupe, however, said that supermarkets must make sure that their foodservice departments are designed to fit the needs of their customers, not their internal operations. He has noted many supermarkets that begin cooking rotisserie chickens early in the morning, which is not when the consumer is ready to buy. He reiterated Ms. Gallagher's advice that a retailer should limit what they do foodservice wise to only the areas in which they can excel.
And Ms. Gallagher said that this philosophy does not mean that each item has to be a high-end offering. At the Charlotte location that she discussed, she said the supermarket's biggest foodservice offering is a twice-baked potato. Mr. Coupe concluded that supermarkets that want to experience growth in the coming years have to get involved in both foodservice and convenience.
Speaking at a workshop session here at the Produce Marketing Association Fresh Summit convention concerning the blending of the retail and foodservice sectors, Ms. Gallagher said that the addition of supermarkets as a potential employer is fortuitous for her profession as more and more young people are choosing that occupation. These future chefs come into the university hoping to emerge as Food Network stars and not interested in working long hours at a restaurant. While a supermarket will not likely offer them stardom, it does offer hours that are more regular and a different environment than the typical restaurant.
Kevin Coupe, who bills himself as The Content Guy, set the stage for the discussion as he talked about various consumer trends. The consumer -- especially those younger than Baby Boomers -- are not loyal to the traditional supermarket format, so retailers should not be either. And retailers are catching on to this phenomenon, according to both Ms. Gallagher and Mr. Coupe.
"The Content Guy" said that the content of supermarkets has changed dramatically in recent years with more and more retailers including ready- made food as part of their businesses. The newer stores are devoting less and less space to "center aisle" and more to the periphery, which typically includes expanding the deli and ready-made food departments.
Ms. Gallagher discussed a local independent retailer that has seen its in-store foodservice sales grow at a phenomenal 125 percent clip over the past year. She said that currently about 40 percent of the store's floor space is devoted to the foodservice category.
Mr. Coupe said that store formats are constantly changing and that there is a general blurring of traditional formats. Home Depot, he said, is testing a convenience store format on some of its properties, and Europe's largest retailer -- Tesco -- is planning to open 200 convenience stores in Los Angeles and Phoenix over the next several years. Mr. Coupe said that these stores are being called "convenience stores," but Tesco is sure to explore new territory with its convenience concept. Those stores are expected to be very heavy in ready-made foods. To compete, traditional retailers have to follow suit ... or lead the way in their own markets.
Mr. Coupe said that the younger generations are multi-taskers who love to do five things at once. He said that this does not bode well for the future of the supermarket experience, which he called one of the most linear experiences one can have. He argued that Millennials are not ever going to be interested in walking up and down a grocery store aisle as their parents do. Already, he said, Amazon.com offers 14,000 SKUs of food. He said that retailers must satisfy the needs of their customers, whether those needs fit into their current format or not. Change or perish, seemed to be Mr. Coupe's battle cry.
Ms. Gallagher cautioned retailers against getting involved in foodservice offerings unless they make a total commitment to do it right. And doing it right, according to this teacher of future chefs, is to hire trained professionals. She said that a supermarket does not have to offer a wide variety of items, but it does have to make sure that what it does it does well or the consumer is not going to buy it.
Both speakers said that a well-developed in-supermarket foodservice operation can work hand in hand with the other departments - including produce - to reduce or completely eliminate shrink. Items that do not sell or are nearing the end of their shelf life can be switched to deli and used in a prepared food manner.
Mr. Coupe, however, said that supermarkets must make sure that their foodservice departments are designed to fit the needs of their customers, not their internal operations. He has noted many supermarkets that begin cooking rotisserie chickens early in the morning, which is not when the consumer is ready to buy. He reiterated Ms. Gallagher's advice that a retailer should limit what they do foodservice wise to only the areas in which they can excel.
And Ms. Gallagher said that this philosophy does not mean that each item has to be a high-end offering. At the Charlotte location that she discussed, she said the supermarket's biggest foodservice offering is a twice-baked potato. Mr. Coupe concluded that supermarkets that want to experience growth in the coming years have to get involved in both foodservice and convenience.
