Watch out restaurants, grocers are coming for you

It was just a couple of weeks ago that I was strolling the vast halls of McCormick Place in Chicago, seeing (and tasting) the latest foodservice innovations at the National Restaurant Association Show.

I’m writing this from the bustling trade show floor of the 2023 International Dairy Deli Bakery Association (IDDBA) conference in Anaheim, California, a massive industry gathering that is similar to the restaurant show in many ways but decidedly distinct from it because of its prevailing message: Watch out restaurants, grocers are coming for you.

From the first general session Sunday, IDDBA attendees have been told of their tremendous opportunity to steal dollars from restaurants. The pandemic made consumers less dependent on dining out, out of necessity, of course, and then soaring inflation sealed the economic deal for many folks to keep eating at home.

One of the general session’s slides had the headline, “Curbing restaurant spending affects all occasions,” noting the prime opportunity grocers have to steal share at breakfast and lunch.

This competition between restaurants and retail over food-buying dollars is nothing new. (I spent a half-dozen years as an editor at WGB sister publication Restaurant Business and one of my first stories was about why restaurant operators should be nervous about the mammoth foodservice assortment offered by the then-new Whole Foods on Chicago’s North Side.)

But that battle seems to have reached Carolina Reaper-level intensity recently, especially as food-away-from home inflation remains up over food-at-home prices.

It’s time—well-past time, actually—for grocers to start thinking more like restaurants.

I chatted on the show floor with Anne-Marie Roerink, principal and founder of grocery market research firm 210 Analytics, who offered up some ways supermarkets can emulate restaurants.

Make the value calculation impossible to ignore, Roerink said. She pointed to Wegmans, which displays the per person cost of a meal’s ingredients, much like a diner would find on a restaurant menu.

“They’re showing, ‘Good luck trying to get a nice spaghetti dinner for $2.50,” Roerink said. “Putting a number on there is really, really important.”

A sample display at IDDBA 2023 shows how to merchandise viral TikTok recipes. / Photo: Heather Lalley

Restaurants drive traffic with their limited-time offers. Why can’t grocers sell a pizza of the week or offer seasonal baked treats or Taco Tuesday selections to lure shoppers in for an extra trip?

Play up what your deli or bakery is known for (and, if you don’t have something, create something). When you sit down at a restaurant, the waiter will talk up the signature dish, she said. Grocers, too, can develop a must-have item.

Borrow another trick from restaurants and upsell, upsell, upsell, she said. Move some grocery employees from the back of house to the sales floor to offer product suggestions. Merchandise some little bottles of sake next to the sushi section or single servings of flan next to the refrigerated taco kits. Get a TikTok fan from the store to track viral recipes and merchandise them accordingly.

But maybe, just maybe, Roerink told me, restaurants and grocers don’t need to view themselves as rivals. With restaurant prices rising, studies have shown that diners are skipping meal components when they order takeout and delivery.

That leaves a dollar-sized hole for grocers to fill.

“What a huge opportunity for retail to be that appetizer, dessert, beverage, side dish,” she said. “We think restaurants versus retail. The world is better off with more of a balance. You don’t have to lose that entire dollar.”