Grocery Business - September 2017

In retail parlance, it is known as a “labelscar” – the faded but still- visible banner left behind from the removal of a sign on a shut- tered retail outlet. Drive on any major highway or around the outpar-cel of a regional mall and chances are you’ll see at least one labelscar on a former fast-casual restaurant. Other telltale signs of the bygone establishments include the readily recognizable features: overgrown shrubbery; weeds poking through the mulch and cracks in the parking lot; torn and faded awnings with the name blacked out; and brand-specific attributes like the mustard-yellow exterior walls of a Ruby Tuesday, or the blue chalet roof of an IHOP.

Those once-popular eateries have closed because, Indeed, the increasingly sophisticated supermarket foodservice programs are having the biggest impact on casual-dining joints like Ruby Tuesday and Applebee’s, notes Aimee Harvey,

managing editor, Retail Foodservice and foodservice editor, CSP, at Technomic, a Chicago-based sister company of

Grocery Headquarters. In fact, Applebee’s same store sales fell 6.2 percent in the second quarter, prompting its parent company, Dine Equity, to announce plans to close up to 135 locations, along with about two dozen IHOPs, which it also owns.

Technomic research shows that the number of consumers who are visiting the supermarket 10 or more times a month has increased. “They are coming into the supermarket and buying more prepared foods,” Harvey says.

Michelle Cantalupo, supervisor of
fresh foods at Food Circus Super Markets,
a Middletown, N.J.-based operator of
five Foodtown stores along the North
Jersey Shore, readily attests to Harvey’s
assertion. “Our foodservice has been
growing by leaps and bounds. Within
the last year to 18 months,” Cantalupo
continues, “our foodservice has gone up
a full percentage of retail sales.”
In addition to its highly popular fried
chicken, Food Circus markets a full line
of refrigerated, pre-packaged complete
dinners, entrees, sides, salads, nine vari-
eties of homemade soups, and a pre-
mium vodka sauce that is the talk of
the town. “Our vodka sauce is probably
our number-one product that sells out,”
Cantalupo says, while also pointing out
other unique items, like the eggplant pie
– think eggplant parmesan in a pastry
shell.

Supermarkets can get shoppers to
come in even more frequently than 10
times a month if they offer an onsite res-
taurant featuring good food at popular
prices, says Richard J. George, Ph.D., pro-
fessor emeritus, Food Marketing, Haub
School of Business at Saint Joseph’s
University in Philadelphia.
“The supermarket industry is used to
people coming in once or twice a week
to stock up,” George says. “But with a
restaurant, you can get the shopper to
come in at least once a day, or even a
couple of times a day. The secret is, to
have a successful restaurant and make
the most use of the space, you have to
offer breakfast, lunch and dinner.”

That is exactly what many of the retailers profiled in this month’s cover story on excellence in retail foodservice are doing. Be sure to check out the article to see what they are doing right, because by running a tip-top foodservice operation, supermarkets can turn the tables and eat the casual-dining sectors’ lunch for dessert.