The blurring between food service and traditional retail continues unabated. Forty nine per cent of consumers who buy food or drink-to-go now choose a convenience store, latest IGD research reveals. Most of these purchases are chilled or ambient, rather than hot/warm, but it shows you how far the convenience industry has come in the last decade with range diversification and innovation.
In him!’s food-to-go customer tracking programme, we asked 1,900 food-to-go customers while they were entering or leaving a food-to-go outlet what their three most important priorities were when choosing where to buy food-to-go items.
Their first priority was speed of service, second was a range of freshly made products, third was value for money, and fourth was product availability. When we see these priorities, it comes as little surprise that convenience outlets are catching up their food-to-go competitors.
Convenience stores are local, open longer hours, and have invested in queue management systems. They have recognised that speed of service is crucial to all shoppers – not just to food-to-go shoppers.
More and more convenience retailers are now “preparing on-site”. And “meal deals” are the norm, not the exception, at tens of thousands of convenience stores around the UK, offering customers good value for money and generating incremental sales for retailers.
And don’t overlook the rather obvious “convenience” nature of food-to-go shopping at convenience stores. Not only can consumers buy their meal or snack-to-go, they can pay bills, withdraw cash from an ATM, buy everyday staples like milk, bread, cigarettes, buy a lottery ticket, and pick up a newspaper or magazine.
So what does this blurring mean for foodservice or caterer wholesalers?
l Your customers are under a range of increasing pressures, from the effects of the recession to increasing competition.
l Your customers’ margins are being squeezed by higher food inflation, price discounting, or a combination of the two.
l Your customers are notoriously difficult to engage with – 75% of them say they aren’t looking for any advice or support from wholesalers, or suppliers.
l Many of your customers could go out of Features > Business, or at least be seriously stretched – cash-flows will come under the spotlight.
l How they shop the depot will also change with them needing a mix of catering and retail products. How are wholesalers going to make it easy for these customers going forward?
Does the foodservice industry embraces market, channel and customer insights as much as the retail industry does? Programmes run by foodservice operators tend to focus more on operational compliance, rather than customer attitudes and behavioural trends.
Convenience retail wholesalers have done a pretty good job at providing a comprehensive support and “value-added” package around the core competence of buying and selling products. A decade ago, the convenience industry recognised that food to go was an attractive offer which could complement their existing ranges and “lock in” their customers – giving them more and more reasons for visiting them. Lately, the convenience industry has focused on providing additional services, extending local sourcing ranges, and tailoring solutions for “the night in”.
The convenience industry has shown what it can do – now it’s time for the foodservice industry to show what it can do. But first, it needs to understand more about its current customers, and work out how to keep them coming back, more often, and bringing other people with them.