Grocers need to improve foodservice to win meal dollars, report says

To compete against restaurants and win meal dollars, traditional grocers will need to make changes to its sourcing and offerings, according to the report. 

The report includes several recommendations. For example, retailers could establish more local and national partnerships that will create a scalable supply chain and help them offer innovative products and experiences. Along with more foodservice offerings should come a store layout that complements foodservice, such as a comfortable seating area and an open kitchen, the study says. 

Retailers also need to define their goals with foodservice, whether that’s driving revenue or fully competing with a restaurant nearby, and then choosing products that could resonate with their local community based on location and customer preferences. 

In a modern retail foodservice model, Kearney recommends grocers stop using traditional metrics like cost, sales and gross margin and instead measure things like guest count, revenue per meal and share of eating occasion.

Retailers are widely working to improve their foodservice offerings. Among those who have executed it well are Whole Foods and Wegmans. Wegmans’ shoppers are fanatical about its prepared foods section, which includes pizza, Asian food, wings, salads, sandwiches and a burger bar. Their prepared meals are now also available for delivery.