US restaurants getting increasing competition for food dollars from nation's grocery and convenience stores, industry official says during recent Industry Intelligence i2live webinar

Nevin Barich

LOS ANGELES , November 19, 2012 (Industry Intelligence Inc.) – Restaurants across the U.S. are getting increasing competition for their food dollars from the nation’s grocery and convenience stores, an industry official said during an Industry Intelligence Inc. i2live webinar on Nov. 14.

According to the National Restaurant Association (NRA), restaurants’ share of food dollars is estimated at 48% for 2012 and has been decreasing since 2005, said Steve Johnson of Foodservice Solutions in a webinar entitled: “The Rise of the Grocerant: Nontraditional retailers focusing on fresh food, portability and packaging to create family meal cohesion.”

Meanwhile, Johnson said, according to the Food Marketing Institute, the “fresh prepared food sector” was the only sector in the grocery industry to post positive sales in 2011. The result, he added, was that the “grocerant” niche—created due to the blurring lines between restaurants and grocery, convenience and drug stores—has the opportunity to become a US$1.2 trillion industry.

With grocery and other such stores starting to target time-starved consumers with ready-to-eat or heat-and-eat prepared foods that are portioned for one or two people, the restaurant industry needs to step up its game, Johnson said. Maggiano’s Little Italy, for example, began experimenting in 2009 with an “Eat Today and Eat Tomorrow” offer allowing customers to have one meal at the restaurant and then take another entrée home with them to eat the next day, all for $12.95. Today, Johnson said, it’s a permanent fixture on Maggiano’s menu, and the Olive Garden restaurant chain has followed suit with a similar offer.

Convenience stores are another sector that restaurants—particularly quick-service chains—need to keep their eye on, Johnson said, pointing out that approximately 90% of 7-Eleven stores in the U.S. and Canada place and receive daily orders for fresh prepared foods and bakery products, including pizza, chicken wings and churros.

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