As grocery stores install full-service restaurants, they give consumers more opportunities to spend food dollars at the supermarket.
From Italian dining at Wegmans in the Northeast to family-style meals at Buehler’s Fresh Foods in Ohio, supermarket chains are investing in full-service restaurants to garner a bigger share of consumers’ food budgets.
According to Wade Hanson, who manages research programs for the foodservice industry at Technomic, “This is a relatively new phenomenon, but it’s one more threat to the restaurant industry. Supermarkets want to keep their customers in the store.”
Although national chains like Kroger and Safeway haven’t ventured into the restaurant business—what some trend spotters call “groceraunts”—a growing number of regional chains offer full-service dining, with various amenities such as outdoor seating and live music.
Phil Lempert, a leading consumer and food analyst, says in-store dining “is really evolving. It’s exciting for the consumer to have so many options. They can sit down and have dinner, and then shop afterward.”
Hy-Vee, an $8 billion chain with 235 stores in the Midwest, is drawing new customers, thanks to 31 Market restaurants (its first opened in 2012), including a stand-alone unit in Chariton, Iowa, near Beaconsfield where the company was founded. Hy-Vee plans to open up to 75 café locations by 2016, offering modestly priced fare plus craft beers.
“The Market Grille and Market Café concepts allow Hy-Vee to meet customers’ changing foodservice expectations by providing a dining experience, not just a grocery store experience,” explains Brooke Barnes, director of restaurant development at Hy-Vee.
The supermarket dining experience “is defined by [regional] demographics and psychographics,” says Lempert. For example, Buehler’s concept, Main Street Grill, caters to Ohio families in rural settings—and at its 11 locations kids eat free on Mondays and breakfast is served all day, every day.
Wegmans, which has 84 grocery stores, has a number of concepts, including five pub-style restaurants in Massachusetts and Pennsylvania, plus its Next Door Grill & Bar, featuring organic foods, and its Amore Italian Restaurant and Wine Bar, inspired by European restaurants, both located in Rochester, New York.
At grocer H-E-B, a 150-store chain in Texas, consumer preferences for local cuisine define the menu in its San Antonio restaurant, the Oaks Crossing Bistro & Bar. Patrons can order sliders, street tacos, brisket, and ribs, with a top-shelf margarita on the side.
And in Byerly’s supermarkets, residents of the Twin Cities will find the Minnesota Grille operating in two of the stores, from 6 a.m. to 9 p.m.
“What the stores are preparing is really good,” reports Hanson. Lempert agrees: “A chef in a supermarket has 50,000 food items to choose from. If a great shipment of tomatoes arrives at the store, the chef can feature them.”