There are more convenient ways to get your groceries than visiting a supermarket, so grocery chains are turning to restaurants to draw customers into stores.
— Kristen Hawley
A renewed focus on the in-store experience is driving grocery chains to add restaurants to their offerings. Since you no longer have to go to the grocery store to stock up on food (thanks, grocery delivery!), chains must make it worth your while. Whole Foods has done this for a while with its in-store prepared foods, but as of last February had added 30 restaurants with waitstaff and 250 quick-service concepts, according to Eater.
“This is the natural occurrence of the convergence of markets and restaurants. Both sides have tried to figure out how to do this, not with a lot of success. Supermarket people come from a place of logistics and production. They want the consumer to have a high production knowledge,” said Boston University School of Hospitality Administration professor Chris Muller on a recent Knowledge @ Wharton podcast from Penn’s Wharton School of Business. “The restaurant side comes with a finished-product mindset — less logistics, more experience management. Those two mindsets are so opposed that neither of them has been able to figure out how to make that middle range really work very well. That full service fine dining concept has been really elusive.”
Of course, adding new restaurants to the mix is a dicey move, amid data that shows the U.S. may have too many restaurants. What works? Partnering with local well-known chefs and restaurants, the same way that Whole Foods and other grocers have been working to feature more local purveyors and producers on their shelves. By adding names that people already know and love, stores can embrace an air of familiarity while still offering something new. Similarly, Hy-Vee, a midwest grocery chain based in Des Moines, announced a partnership with Whalburgers (yes, the burger chain from the family that produced a New Kid on the Block) earlier this year and will open and operate 26 Wahlburgers locations beginning next year. And just this week, the burger chain announced another partnership with Meijer grocery stores in Ohio and Michigan.
“Everything’s blurring in the middle here,” said Muller. “There’s so many drivers in the consumer behavior piece. Who’s going to come up with the magic to both drive foot traffic and change the distribution?”