Grocerants are Restaurant Disruptors

May 01, 2018

Grocerants are Restaurant Disruptors

‘Food experiences’ bring sensory pleasures to generate shopping trips

From sushi boutiques at the front of Whole Foods Market stores, to the variety of dining cuisine themes at Mariano’s, to full-service Market Grilles at Hy-Vee, and fragrant hot dishes at Longo’s, the grocerant options in retail stores increasingly embody the character of popular neighborhood restaurants.

With visual and odorous appeals that lift shoppers’ moods, entice buying, and lift stores’ image as destinations, grocerants are an exciting way for supermarkets to offset trip encroachment by Amazon, discounters, clubs, dollar stores, and other grocery competitors.

These ‘food experiences’ taken from restaurants are evolving in grocerants to include clean eating and local ingredients as well.  “We have evolved into a food experience because grocery shopping is boring and nobody does it anymore,” Jeff York, co-CEO of Farm Boy, told the Financial Post.  Indeed, the share of retail food sales held by traditional grocers in Canada fell from 85% in 2007 to just 75% by Q3 2017, due to growth at Costco, Walmart and other competitors, according to Statistics Canada. 

Moreover, sales of ready-prepared meals at retail stores and meal-kit companies grew by 20% to capture an 8% market share in Canada in 2017, making it the fastest-growing meal segment, found NPD Group Canada.

To the extent that grocerants and their take-out capabilities align with time-compressed healthier eating today, consumers will see them as relevant options for meals and snacks.  Retailers that cluster several dining themes together – perhaps in a food hall setting – will have the taste and health or indulgence varieties to satisfy more eating occasions. 

Rather than develop winning concepts with restaurant sensibilities on their own, retailers increasingly look to partner with successful restaurateurs.  Josh Onishi, president and CEO of Peace Dining, the parent of Genji, which operates sushi grocerants in Whole Foods Market stores and elsewhere, says supermarkets should recognize how grocerants “burnish their own brand. Having [our eateries] as one of the first things customers see when they walk in reinforces a clean, fresh, high-quality, sustainable, multi-cultural/global, fashion-forward brand image.”