The future of foodservice at retail

May 22, 2018
4 min read

Walk into a grocery store today in the US and you may find an oyster bar serving happy hour specials, an on-site coffee bar with baristas serving handcrafted espresso drinks, a full service bar, or even a full service restaurant. With all of these concepts, the line between restaurant and retailer is nearly gone.

The appeal
While Americans are interested in dining out, high prices may deter more frequent visitation. That’s where supermarket foodservice comes in. Supermarket foodservice programs can appeal to those who may want to dine out, but not spend too much money. At the same time, they can shop for groceries for the week. Foodservice in retail programs can make supermarkets a dining destination, and help supermarkets remain competitive in the shifting retail landscape.

We asked consumers what concepts they would like to see at their grocery store. Sandwich stations and coffee shops are the most appealing to consumers, which aligns with their current purchase behavior. Around 1 in 5 consumers are interested in a full service sit down restaurant in their stores. While we’ve seen bars inside grocers trending, only 10% of consumers are interested in seeing one at their store. We expect interest to grow as these concepts become more mainstream.

Innovative concepts
There is a lot of potential for foodservice concepts to add to the overall experience for grocery shoppers. Given that three in five consumers say they enjoy grocery shopping, grocery retailers are starting on a positive note. Furthermore, two in five consumers say they are more likely to shop at a store that offers an experience, such as cooking classes or an on-site dietician, and one quarter of Americans say they like to spend time in grocery stores when not shopping (eg to eat, work).

Here are a few examples of innovative foodservice concepts in retail already making an impact:

Whole Foods location in Chicago launched a third party poke bowl restaurant called Poke Bowl Co. The restaurant uses existing space within the store, but has its own branding and website. In January of this year, Locol, a fast casual in Los Angeles, opened a location in a downtown Los Angeles Whole Foods.

Kroger opened its first Kitchen 1883, a full service restaurant (FSR), last November next to a Kroger Marketplace store in Union, KY. This fall, Kroger plans to open the first stand-alone Kitchen 1883 restaurant, which will have a patio and feature new, local dishes for lunch, dinner and weekend brunch.

HEB is another retailer with a variety of FSR concepts. These include BBQ, ramen, and taco spots, with some locations featuring local live music, happy hour or trivia.

It seems like we are always talking about balancing health and indulgence and Hy-Vee’s partnership with Orangetheory Fitness and Wahlburgers is a perfect of example of that sense of balance. With the partnership, Orangetheory can open units inside or near Hy-Vee and nutritionists help members choose healthy foods from the store. The Wahlburgers deal means Wahlburger-branded menu items are featured at the store’s FSR, Hy-Vee Market Grille.

Walmart is also boosting its foodservice program. In 2017, Walmart opened a location of the healthy fast casual, Grown, in one Orlando store. Grown specializes in all organic healthful meals and beverages.

Amazon is even getting in on the convenience foodservice game. In January they opened a 1,800 square foot Amazon Go retail store with no check out required inside their Seattle headquarters. The stores offer a wide variety of foods prepared at an on-site kitchen including sandwiches, salads, and bowls. Amazon recently announced an expansion of Amazon Go stores to Chicago and San Francisco.

Check out the highlights from this year’s National Restaurant Association Show here.

Amanda Topper
Amanda Topper

Amanda Topper is the Director of US Research: Food, Drink, Foodservice, Flavors & Ingredients, responsible for overseeing all of Mintel’s foodservice offerings, as well as providing insight and competitive analysis across scheduled deliverables, and client and industry presentations.

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