Saturday, September 5, 2015

Are Chain Grocery Stores and Chain Restaurants Being Derailed?




I have you noticed that Kodak is nearly out of business. Growing up in the 1960’s and ‘70’s, every family had a Kodak Camera and I still have one of mine. Those yellow boxes were everywhere and getting your very own Kodachrome camera was seemingly a rite of passage, heck, Paul Simon even wrote a song about it.

As digital cameras gained popularity, Kodak stuck to what they believed. They sneered at digital’s quality, righteous in their knowledge that Americans would NEVER give up shiny pictures for their photo albums.

Today, cell phone cameras take most of the pictures and they are rarely printed. Kodak will shut the doors, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook.

Being dead and correct is not a great strategy.  Today legacy chain foodservice retailers are either growing or dying much the same as Kodak. Simply look at restaurant foodservice retailers that filed bankruptcy of late: Claim Jumper, Mr. Pita,
Friendly’s, Chevys, Sbarro, Perkins.  They are not all dead but they have been far from right.

These are statements frequently heard from legacy restaurant operators. Like Kodak, crystal clear that what has always worked will continue to work.

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we deliver.
• We don’t allow our brand to wander, we protect our brand.
• We don’t use online ordering, I-pad ordering or voice screen ordering.
• We don’t advertise on Google, Twitter or Facebook.
• We don’t open for breakfast.
• We like the umbrella approach each store different personality but under one umbrella.
• Video menus and video signage is visceral gimmickry.
• We don’t measure ingredients, we create daily specials and simply show employees how to make it
• We can’t raise our menu prices.

How did a dominant brand and sector leader like Kodak, in a rock-solid consumer staple lose everything? Simple, they determined the market, the direction of that market and took the steps to conquer it.  If that sounds like your restaurant, retail foodservice sector, or niche leader, you better keep reading.

There is little about today’s market, the consumer or food marketing / promotions that was predictable 3 years ago. In the next three years the rate of change will continue to increase. So let’s look at the above list:

Reliability and a comfortable working relationship is correctly a key to success.  However, if you find your team is blaming the economy, minimum wages increases, cost of health care and rising food cost for disappointing results. Do not forget that many other foodservice companies are growing both the top and bottom line, number of units and garnering market share.  It might be time for Outside Eyes. 

We always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk of Livingsocial and Groupon and how can you know what works. Here is the point, what you measure you manage. All advertising must have an objective that is clear and measurable to insure a proper marketing ROI.

We don’t deliver – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing.  Delivery is not about you. That’s right it is about the consumer.

We protect the value of our brand and its integrity for the consumer, our shareholders and stakeholders.  We know the consumer is dynamic not static, but our customer’s comeback because we have a brand promise and they trust in us to keep that promise. Sounds a lot like Kodak, don’t you think?

We don’t use online ordering our food does not “carry” well.  Think about this if you don’t have a way to connect your menu to computers and mobile devices, your competition will woo your customers. Consumers are time starved, and hooked on technology, make it easy.

Google or Facebook – as above, set up a Facebook page, it costs nothing. Have someone help if you need it and then monitor your page 5 minutes a day.  Don’t think about it get started today.

We don’t open for breakfast – you pay rent 24/7, find ways to increase the utilization of your “factory”. Considering catering or school lunch program, contract out your kitchen.  Don’t become the next Kodak of chain restaurants, grocery stores, or convenience stores.

Different store brands / personalities under one large corporation and all expected to operate utilizing a uniform set of metrics.  Worked well in the 70’s, 80’s but you have the answer.  Let me know just how well that works out.

Visceral gimmickry does not replace high quality food and great service ever.  Who defines quality service? You via your brand promise, or the consumer?

We don’t measure ingredients; my employees know how much to use – why have menu prices, let customer pay whatever they want. If you don’t care what your product costs, you CAN’T make money.
We can’t raise our menu prices – tell that to the gas station owner on the corner, or the farmer growing your food. Costs are up, you must raise your menu prices or you will not exist.

Kodak management, smart and hard working as they were, did not see the world changing, fortunately you do. Realize that change is good and necessary. Act now to challenge your assumption, create new revenue streams and increase profits.  Success does leave clues, Disney movies leave you with a smile, being dead and correct is not a great strategy.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant. 

Friday, September 4, 2015

Is Catering 7-Eleven’s Next Step?




When 7-Eleven announced its partnership with DoorDash for delivery in five new U.S. markets Foodservice Solutions® Grocerant Guru™ asked “Will 7-Eleven begin a regional office catering programs to drive incremental sales in these five new markets?” 

With the 7-Eleven and DoorDash partnership solidified providing on-demand delivery from participating franchise 7-Eleven stores in five major metropolitan markets across the United States. Beginning this week, 7-Eleven customers in New York, Los Angeles and Chicago will be able to order products from their local 7-Eleven stores, with the service rolling out to Washington, D.C., and Boston in the coming months. 

Can this strategic relationship become the foundation to drive 7-Elevens new focus on fresh prepared Ready-2-Eat and Heat-N-Eat food to new heights? Our team at Foodservice Solutions® thinks so.  This is DoorDash’s first partnership outside of the restaurant industry.  It is widely reported that the new partnership will include in-store marketing, local promotions and the availability of “Convenience Packs”, well that sounds like office catering to us. 

There can be now doubt that 7-Eleven’s expanded product assortment of grocerant niche Ready-2-Eat and Heat-N-Eat fresh foods and beverages to both office setting and household goods offer customers a one-stop shopping experience, which is a compelling value proposition to busy, on-the-go consumers. 

Raja Doddala, 7-Eleven’s vice president of innovation and omnichannel strategy stated; “This partnership between the world’s largest convenience store chain and a leading on-demand delivery start-up can redefine convenience. DoorDash’s technology, data analytics and commitment to the customer experience impresses us and makes them a great match for 7-Eleven’s omnichannel initiatives.”

Driving top line sales and bottom line profits today is more about inclusion than anything else.  By adding delivery 7-Eleven is expanding its reach, inviting new customers, while elevating its brand. 
Invite Foodservice Solutions® to complete a Grocerant Scorecard or a Grocerant Program Assessment.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant  Contact: Steve@FoodserviceSolutions.us
 

Thursday, September 3, 2015

C-stores and Restaurants Look Out Dollar General Going Grocerant




Time starved, price conscious consumers will soon be welcoming a new entrant into the Ready-2-Eat and Heat-N-Eat fresh prepared food niche.  Dollar General announced this week that they will roll out a new prototype for all its stores in 2016.

Dollar General CEO Todd Vasos announced during its 2015 fiscal second-quarter earnings call. That the  new store type will offer speedier checkouts, a greater focus on perishables and health and beauty, and a more customer-friendly shopping experience.

Vasos Stated "The consumer will be able to and have faster, more convenient checkout, an attribute that is a high priority for our core consumer,  We have value engineered the design to be capital efficient and easier to operate for our store teams."

The goal of the prototype is to emphasize perishables and help moms find quick meal solutions or fill-in items, Dollar General will expand cooler penetration across store bases. This was prompted by research that shows a basket with a perishable item is nearly 50-percent higher than the chain average.

"This is a big opportunity that we know how to capitalize on, as we have already increased the cooler count on average by just over 50 percent since 2008," Vasos noted. Overall, consumables made up 75.7 percent of Dollar General's revenues last year, up from 63 percent a decade ago.

Vasos continued "We are well positioned to capitalize on this trend given our brand offerings and price relevancy," Our ongoing affordability initiative will be front and center with the new fresh approach."
Restaurants and C-stores have been building sales momentum within the Ready-2-Eat and Heat-N-Eat fresh prepared food niche. Now that Dollar General has entered the mix the price, service, quality equilibrium will be resetting once again.  Are you prepared? Do you need outside eyes?

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information

Wednesday, September 2, 2015

Fast Food Two Tier Pricing Continues To Evolve




Economic upheaval continues to linger with employment instability from China to Germany. In developed countries the whipsaw stock market is creating uncertainty and disillusionment.  Fast Food restaurants are still aspirational for many consumers around the globe. 

All the while in the global goal for most countries is growth and employment stability.  In Brazil, China, Africa the goals are the same a stable or growing economy too powered lower-level economic groups to the “new middle.” Two tier pricing is required by global brands today as they need to garner new customers at each end of the spectrum to sustain growth. 

Chain restaurants specifically branded fast food restaurants are leveraging and expanding Two Tier Pricing to first garner trial and secondly build brand loyalty.  They offer entry level branded products like McDonalds dollar menu that allow existing customers trial and existing customers trade up either with LTO’s or specials on branded menu items. 

The Euromonitor put it this way.  “Fast food is changing, and not just in the category's dominant US market. Amidst fierce competition, fast food brands have been forced to differentiate themselves with broader menus, better food and higher-end outlet designs. In developed markets this has led to the popularity of the fast casual segment, but in emerging markets (most of which show a strong preference for full-service dining) it has helped fast food gain traction as a modern, lower-cost alternative to more traditional foodservice formats …

The branding opportunities inherent in the fast food business model have also allowed these chains to appeal to developing market consumers' taste for exciting new dining experiences. South Africa-based chicken fast food brand Nando's, for example, has relied on strong branding, exciting flavours and a unique dining experience to set it apart from other chicken fast food chains, a fact that helped it achieve 19% value growth. Similarly, UK bakery products fast food brands EAT and Pret a Manger have both found success with a positioning of convenient, high-quality food, a modern atmosphere and quick service. 

Mix and match meal component bundling with a focus on both product and price positioning is key to drive growth in a volatile marketplace. Focuing on fresh, high-end ingredients, especially, has helped the brands compete with more traditional fast food concepts, and this kind of above-and-beyond competitive positioning will continue to integral to the success of any new fast food concept….

The universal commonalities in Reay-2-Eat and Heat-N-Eat fresh prepared food are fueling retail success around the globe.  Do you have a pricing strategy? What is your growth rate?  

Invite Foodservice Solutions® to complete a Grocerant Scorecard or a Grocerant Program Assessment.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant  Contact: Steve@FoodserviceSolutions.us