As confidence in the economy waffles back and forth, spending habits have been difficult to keep track of. High grocery prices are impacting dollars spent at the supermarket, and financial uncertainty has limited spending in restaurants. Consumers are making highly personal decisions about how to budget their money and what is worth splurging on.
Bridging the “to eat out or to eat in” gap is a new trend from larger restaurant chains: restaurant products in the retail space. “We’ve seen an increasing amount of restaurant brands extending to retail shelves in the past several years, including debuts in the past year from brands like Zaxbys and Hooters,” reports Alicia Kelso for Nation’s Restaurant News. Of course, this isn’t a new tactic—many brands, such as Cinnabon, Starbucks, Olive Garden, have been stocking retail grocery shelves for a while. But it is a growing one. “More brands have been making the jump into retail in the past several years, including Subway, Wow Bao, Buffalo Wild Wings, and Chick-fil-A.”
Like consumers, Kelso explains that food service business owners are trying their best to navigate these economic times, “seeking a diversified revenue stream amid a challenging environment and, perhaps more importantly, increased brand awareness.” Simply put, stocking grocery aisles with recognizable, branded products increases the number of touchpoints for restaurants. Consumers may purchase the products at the grocery store, but more importantly, the opportunity for marketing to new and existing customers is greatly increased.
According to Kelso, this marketing strategy is not just trending with the times—it’s competitive. “New research from Technomic Ignite shows that snacking consumers have migrated toward packaged options and freshly prepared foods in the past few years to satisfy their cravings. Since 2021, packaged snack purchases from retailers rose by 5 percentage points, while purchases from restaurants and other foodservice locations saw a 3-percentage-point decline.”
In essence, branching into grocery stores is a personalized and targeted marketing strategy: it is what the consumer wants. “According to Technomic, this shift is driven by retailers strengthening their position as a leading source for overall snack purchases, driven by increasing consumer interest in packaged snacks and the prepared food sections of the grocery stores.”
For many restaurants, the opportunity to move into retailers begins with the in-house menu. There must be something distinguishing about your menu offerings that can transfer easily to grocery shelves or in other words, points of differentiation. For many businesses, it’s a signature sauce or a recognizable item that can be pre-packaged and prepared at home. Utilizing menu engineering, like National Restaurant Consultants specialize in, helps restaurant owners to understand their menus and determine how they might also seize this chance at growing their market.
“The opportunity in retail expansion can also stretch into online business and marketing practices,” notes Richard Weil, principal and owner of National Restaurant Consultants. “Meeting the needs of consumers, furthering the brand, and, most importantly, wowing consumers with great quality, servic,e and tastes can expand and increase revenues and profits for operators.”
Reach out today to work with a restaurant consultant. We can help engineer your menus and explore other marketing and revenue creation options that touch on what is trending among consumers today.