Photo by Geraldine Lewa on Unsplash
By Dennis Limmer
Source: retailwire.com, September 2024
Amid rising regulatory pressures and a surge in theft, U.S. grocery chains are navigating a tough market in 2024. Consumers are tightening their spending, and grocery issues are getting political as inflation has increased food prices.
As a result, grocers are forced to push their businesses in order to remain viable and competitive in this demanding environment.
One strategy that seems to be making a resurgence is in-store dining.
Referred to as a “grocerant,” a hybrid term for the words “grocery” and “restaurant,” this idea originally described the concept of grocery stores providing in-store dining options and ready-to-eat or easy-to-heat prepared meals. The approach was often called “food service at grocery stores,” and it sought to reengage customers by stepping into the restaurant space, according to NorthStar.
More recently, however, this concept has “metamorphosed into a far-reaching trend” that now involves selling retail food items intended to be eaten immediately.
According to The Food Institute, grocerants have seen a major revival. Many supermarkets had previously expanded their food courts and dining areas to attract customers and increase revenue. This shift is highlighted by 2018 data from Supermarket News, which noted that while some retail spending had shifted online, dining-out expenditures had surged. In the U.S. at the time, spending on dining out surpassed grocery spending, transitioning the economy from retail-driven to more experience-driven, where foodservice became a new focal point — fueling the rise of grocerants.
However, the pandemic forced many of these dining areas to close, temporarily halting their growth. Now that things have returned to a new normal, grocers have started to revisit the strategy again, though with a “twist” this time.
As reported by The Food Institute, “Rather than focusing on extravagant dining spaces, they are now emphasizing value meals that compete directly with fast-food and takeout options. This shift reflects a broader trend towards offering affordable, convenient meals that cater to consumers facing tighter budgets.”
On the outlet’s podcast, CEO of SupermarketGuru, Phil Lempert, said, “So I think what we’re going to see…with all the fast-food restaurants pushing these $5 meals, I think we’re going to see the same thing happen in supermarkets, and they’re going to have to. It’s going to have to turn away from just having a gourmet meal into a value meal as well.”
Food equipment company Hess emphasized that soaring costs due to rising inflation have made dining out less affordable, leading consumers to look for budget-friendly yet high-quality dining experiences elsewhere when food in their fridge doesn’t appeal to them. Many are now finding these options at their local grocery stores. According to the company, “Supermarkets across the Midwest and all over the U.S. are upping their game to meet the demand for delicious — and economical — meals.” Traditional grocery stores are transforming into “a new culinary experience,” offering in-store dining, a wide variety of prepared foods, and exclusive private-label brands.
Furthermore, grocerants are becoming increasingly popular as they cater to the modern consumer’s demand for convenience, allowing shoppers to easily pick up groceries, enjoy a meal, or find one to take home all in one location. This one-stop-shop experience not only meets the needs of busy individuals but also boosts foot traffic and combined revenue for grocers. By offering cooked and pre-cooked food options, grocerants attract a broader customer base and incite the chance for cross-sales between customers who originally went to the grocery store with the intention of just buying groceries or dining in.
