BOSTON MARKET

David Merrefield

It's not often that Supermarket News profiles a company with little connection to the conventional food-distribution industry, but this is such a week.

As the reference box on Page 1 shows, we're profiling the restaurant and takeout chain Boston Market, a company much-mentioned in supermarket circles as one that is quickly emerging as a direct and serious competitor.

Here's a slightly overstated backgrounder on what's happening: It's only when there is no economical or otherwise satisfactory alternative that supermarket shoppers will buy, then lug around, meal components in the form of boxes and cans -- components that must be taken home and rendered into meals there.

Boston Market has caught on to the fact that supermarket shoppers (that is, just about everyone) aren't as interested in meal components as they are in the objective of putting a finished meal on the dinner table. So Boston Market offers finished meals, and, in the process, is not just providing formidable competition to supermarkets, but is offering supermarket operators a clue about how they must change stores in the future.

But first, let's take a look at Boston Market as a business and product concept. As for the business end of things, there's no arguing that the outfit is doing something right. The chain, based in Golden, Colo., operates more than 700 stores. Last fiscal year they produced a top line of $384 million. That's not staggering sales volume by supermarket standards, but the growth rate is: The volume number represents nearly a 20-fold increase since 1991. Projections call for the chain to drive sales of $3 billion out of 3,000 units just four years hence.

Moreover, Boston Market is far flung: It's now in 34 states and there's every reason to imagine that, in time, the nation will be blanketed. So few conventional food stores will remain immune from this form of competition.

As for products, Boston Market offers a simple home-meal replacement line consisting of four main entrees -- rotisserie chicken and turkey plus ham and meat loaf -- flanked by 16 hot and cold side dishes. Some 65% of the business Boston Market does is in dinners.

It seems that Boston Market's chief appeal is price. Individual meals sell for about $5, while family meals cost $3 to $4 per family member. Another appeal is convenience. Waiting times are generally brief (although not always, and the overhead menu boards are complex) and if the meal is to be taken home, everything needed to set a reasonably good-looking table is supplied. All table settings are disposable. To me, Boston Market offers a satisfactory but decidedly utilitarian dining experience. The menu offering would never be confused with gourmet dining, and, truth be told, the meals aren't far removed from those served up from steam lines of a military mess hall. In a way, the very fact of the unpretentious menu and its unassuming execution accentuates how ready shoppers are for the replacement-meal idea.

And it's apparent that the Boston Market game plan succeeds to such an extent that it's already plucking significant revenue from supermarkets' pockets. Boston Market will pull away more revenue in the future, not just because of growth but because it plans to move toward selling meals intended for next-day use, and because it plans to increase efficiency through the use of some central preparation. So the question is, what fight-back strategy should supermarkets initiate?

Let's start with this: Clearly, there's no way even the best home-meal replacement concept on earth will completely supplant supermarkets -- shoppers will still go to a food store for many purposes. The answer for the supermarket may be to build on the natural strength of a large product line and, let us hope, a strong freshness image, by establishing a store-branded finished-meal outlet at the front of the supermarket, or in the parking lot. Shoppers, upon approaching or entering the supermarket, could place their meal order in person or by means of a kiosk. Then, upon completion of the shopping trip, the meal order could be ready and waiting for pickup, perhaps from a walk-up or drive-up window. An attractive seating area should also be provided.

To strengthen the strategy, the core supermarket should offer as many ancillary services as possible -- features such as video, pharmacy, expanded beverages, expanded produce, fresh-prepared and so on -- in a bid to increase shoppers' incentive to patronize the supermarket's meal-replacement outlet, as well as its total product array.

It seems to me that without too much effort, supermarkets could make their own meal-replacement approach seem far more spirited than Boston Market's one-note tune.