We live in an era of chaos. Government-by-chaos isn’t working out too well, and retailing in the era of chaotic disruptors is facing big risks as well.
But hope prevails. When it comes to retailing, sometimes there’s opportunity in chaos. That’s certainly true when it comes to food retailing. Some supermarket retailers are pulling threads from restaurants and other forms of foodservice to create a hybrid that looks different, feels different and will be a part—and maybe a big part—of the future of food retailing.
Borrowed Concepts Yield Powerful New Formats
New food retailing models have many permutations but their current highest creative expression is the grocerant, which is a combination of a full-line supermarket, with all its usual departments, plus a restaurant, maybe a bar and sometimes a lot of other foodservice offerings.
Grocerants provide an interesting efficiency proposition since foodservice ingredients can be sourced directly from the supermarket side.
Before we get to that, let’s look at some of the alternative ways consumers can access food, a few of which are pretty close to being grocerants. Some are new and some have been around for a while, however, these alternative delivery systems are growing in popularity and success.
- Food Halls have sprung up in recent years as something of a food-cum-entertainment concept. High-profile food halls can be found in New York, Los Angeles and Chicago. Multiple vendors offer a myriad of upscale food choices under one roof. The halls offer a few gourmet pantry staples to take home, prepared-food items to eat off-premise or an on-premise meal at a full-service sit-down restaurant or bar. Food halls aren’t quite grocerants as they lack many key supermarket staples and CPG categories, but they trend in that direction.
- Many conventional supermarkets also present product that is ready-to-eat, or ready-to-heat at home. Some supermarkets feature self-service seating areas for customers who want to consume a meal in the store. The best example of such a supermarket is Wegmans, which offers restaurant-quality, fresh-prepared food at many of its locations, complete with seating areas. Wegmans also operates grocerants. But in the main, this type of eat-in, take-out format also falls short of being a full-scale grocerant because it lacks restaurant-like service elements. But it’s close.
- A few other forms of food retailing have either sprung up or are on the march, reflecting the depth of disruptive activity facing conventional supermarkets. They include food trucks, urban and rural farmers’ markets and urban produce vendors that often set up on a sidewalk near a conventional food store. Farmers’ markets make the farm-to-fork movement a real possibility in highly urban markets such as New York City.
One especially impressive example of a grocerant is the newly opened Whole Foods store at Bryant Park in New York. The store, at 43,000 square-feet on two levels, is unusually large by Manhattan standards. It features the usual offerings of a Whole Foods store; namely, an edited selection of food and nonfood items. In addition, there are several restaurant options at the store. Here are some of them:
- An outpost of “Frankies 457 Spuntino,” a well-known Italian restaurant in Brooklyn. The in-store version features various popular specialties such as salads, sandwiches and store-made pizza.
- “Sushi Kano by Genji,” featuring Japanese dishes along with omakase service, i.e., the chef selects a variety of small plates for the table.
- “Harbor Bar,” a raw bar featuring oysters, lobster and a variety of other seafood. A cocktail, wine and beer selection is available.
- “Simit + Smith,” a food cart offering Turkish-style breads, such as simit, served with cheese and olives.
- “Produce Butcher,” a service department where store personnel will butcher any produce item at a customer’s request. Produce can be grated, chopped, cut, sliced or custom prepared in any way a customer likes. These butchers aren’t just for meat anymore.
- Several other carts and kiosks offering coffee, pizza, toast, sandwiches and the like.
Whole Foods’ use of the grocerant format at this location represents good marketing tactics, the area is heavy with office workers who are on the lookout for lunch opportunities and a meeting place for after-work socialization. The supermarket side of the store is useful for workers who want to take a few items home, and it appeals to residents in the area who want to make a fuller shopping trip.
Whole Foods, of course, is not the only example of a grocerant. Wegmans, as mentioned earlier, runs full-service restaurants at several of its locations in its home state of New York, along with other mid-Atlantic states. Wegmans’ restaurants operate under the names of Next Door, The Burger Bar, The Pub, and Amore.
Grocerants present several advantages over a stand-alone supermarket or restaurant, not the least of which is the ease of sourcing foodservice ingredients. From the food-retailing perspective, grocerants help lift the store above competitive threats such as online delivery and meal kits. That’s because a grocerant is really an entertainment venue, and we all know that entertainment can’t be delivered by an online food retailer or in a meal-kit box. Moreover, grocerants bring in a different type of shopper: those seeking meals, not pantry staples, thereby opening the potential of crossover shopping.
From the restaurant point of view, co-locating in a grocerant exposes its brand to a large volume of new customers. Many shoppers go to a supermarket once a week, or more often; restaurants are lucky if they get repeat business a few times a year. Grocerants build traffic, with crossover potential.
In more general terms, grocerants demonstrate the value of borrowing concepts from other retail forms. They are, after all, really the nostalgic side of a department store. From their earliest days, department stores had one or more restaurants within their walls. That remains true to this day, and mall-based department stores are starting to get that message. Supermarkets are back to the future with leveraging restaurant brands that are popular with their retail customers.
So are there other borrowings that retailers might consider? Try these:
- Costco and Home Depot have lunch counters that give shoppers a quick way to get fed.
- Bed, Bath & Beyond stores have gourmet-food sections under the “World Market” moniker.
- Apparel store Urban Outfitters sells home goods and has coffee bars.
- RH sells apparel in addition to upscale curtain rods.
- Many restaurants sell private brand goods as mementos, such as condiments and apparel.
It’s a big world out there. If you’re out of original ideas, take a page out of other retailers’ playbooks, borrow the best concepts and then make them your own with your special spin.