SECAUCUS, N.J. -- If supermarkets are to survive their battle with other food-service operators, they must learn to offer consumers total "meal solutions," said an industry consultant.
"The consumer today is looking for meal solutions, and TV dinners just won't cut it anymore," said Brian Salus, president of Salus & Associates, a Midlothian, Va.-based consulting firm. "Although the frozen food section is alive and well, it is not growing to the extent, nor does it have the interest, passion and the excitement, that the 'meal solutions' area has."
Salus, a former director of food service at Ukrop's Super Markets, Richmond, Va., spoke about the changing role of the supermarket at last month's New York State Food Merchants Association/New Jersey Food Council annual convention here.
Salus predicted that the food-service sector, including restaurants, delicatessens and fast food outlets, is growing at such a rate that it will surpass supermarket food sales over the next 15 years.
"Unless the supermarket takes steps to get into the food-away-from-home business, unfortunately we will see a number of retailers no longer in business. You [supermarkets] have to reinvent yourselves if you are going to stay alive and well in this burgeoning marketplace," Salus said.
Food is a $700 billion industry in the United States, of which supermarket sales are $286 billion while restaurant sales total $270 billion, Salus said.
He cited poultry as an example of an important supermarket perishables category headed for trouble.
"Grocery stores need to develop fresh ideas. They are still merchandising poultry the same way, even though they are trying to expand the category. What they don't realize is that, according to the National Broiler Council, 48% of all poultry is eaten away from home.
"The market is shrinking, but we are still out there trying to do the same things the old ways, as opposed to having fresh ideas and saying, 'How can I provide prepared poultry that is ready to eat?' That is what has to happen. There needs to be a major shift in terms of this whole thing from a grocery retailer to a food-services retailer," Salus explained.
"Retailers are focusing on grocery, and that is a mistake. It is a shrinking part of the business. Without a doubt, time is really the currency of the '90s. It is not money anymore," Salus said.
He explained that food-service retailing is really a mentality.
"The price-driven grocery mentality has to be left on one side of the store, while the other side has to adopt a food-service mentality of cordial and generous reception. It is almost like being an innkeeper where you welcome your guests, advise them and coach them in terms of the foods that you sell," he said.
Salus went further, claiming that "in food service, price is really not an issue," and adding that, instead, convenience, quality and variety are now the most important issues.
"Supermarkets have been selling chickens for 20 or 30 years, but nobody put it together in a meal solutions center with side dishes the way Kenny Rogers' Roasters and Boston Market have done. It is a very effective tool to the point where they are carving out a tremendous niche for themselves and really threatening the way the retailer has been selling food traditionally."
Salus said retailers must develop new meal solutions to recapture the hearts and stomachs of consumers.
"I would like to see retailers become less reactive and much more proactive. That involves looking at your consumer, talking to your consumer to find what their needs and their interests are, and providing those kinds of services," he said.
Supermarket prepared foods programs must offer fresh taste, high quality, great value (but not necessarily low prices), convenient packaging and be ready to consume or quick to fix, Salus said.