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Retail Foodservice

'Fast Casual' Grocerants Poised to Succeed

Retailers must combine operational and execution practices to be profitable
Photo courtesy of Pixabay

Foodservice at retail looks different across the grocery landscape. The lines between grocery and restaurant blur in a number of ways, from deli cases with prepared foods to hot food bars and sit-down restaurants.

The mashup term of “grocerant” sums up the fusion, but what does the most profitable and successful grocerant model look like going forward?

Wade Hanson, principal with Technomic, recently weighed in on the topic in a “Technomic's Take” piece. In his view, the grocerant most likely to succeed is one that really does combine what’s best, from both operational and execution standpoints, between grocery and foodservice.

Although the future looks strong for supermarket foodservice, Hanson said, the most promising format is the fast-casual concept, given the challenges involved in running a smooth retail and foodservice business at once.

“Rather than a 'restaurant inside a store' model, Techonomic believes we will see a continuation of the limited-service approach that has become more widespread in recent years,” said Hanson, who draws the comparison between a fast-casual grocery concept and the fast-casual foodservice concept Panera, rather than a QSR chain or a full-service sit-down restaurant.

That type of concept within grocery also enhances customer engagement, said Hanson, who believes retailers should and will invest in cafe-like seating areas and interactive, value-added service and personalization of meals at made-to-order stations. “While this may sound extensive, it is essentially building on the current direction taken by most leading grocer banners," he pointed out. Such investments and upgrades are also less than what's needed for fully staffed and operated restaurant kitchens, he said.

The move to such formats may well be on a quick path. Hanson projects that supermarkets will look different within as few as three years, given the changes and competition in and beyond the industry. Part of that different look will be in the fast-casual grocerants built to spur growth and meet consumer needs and demands.

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