When and Where a Grocerant Makes Sense

Christopher Walton, a Forbes columnist, writes how adding a restaurant to a retail environment may or may not make sense.

He says, “Food can be an important part of a retailer’s in-store operations, but whether a retailer should or should not put food into its stores comes down to one simple question: Does it complement a company’s strategic purpose against all the dimensions for why a retailer’s stores exist in the first place?”

Experience in retail matters. But, the term “experience” is vague and hard to define, he writes. Yet two well-known brands, Lululemon and Crate & Barrel, both took a run at defining exactly what in-store experience means for their brands this month when they introduced food into their Chicago-area stores. 

It is no surprise then that food is often at the center of the retail experience discussion, he says. It is an easy thing for people and for retail leaders to understand. People like to eat. They want good food, and often they want to enjoy that food in the company of others. Food, without question, is a driving social force that motivates people to leave their homes. Look no further than millennials, for example, who like eating out so much that, according to a recent 2014 study, they spend a whopping 44% of their food budget on doing so.

But, as he points out, restaurants are notoriously bad investments.

According to a study by Ohio State University, 60% of restaurants fail within the first year, and 80% of restaurants do not make it past their fifth year.