Restaurant Sector Clobbered by Competitive Threats Says AlixPartners

Legacy restaurant chains have been forewarned evolve or fade away.  AlizPartners released a new consumer study that found a shocking “29 percent of Americans say they intend to spend less on dining out over the next year”.  That number is the highest of all 14 categories the study covers. The battle for share of stomach and the food dollar continues to intensify.

In addition consumers surveyed expect to spend “9.1 percent less per restaurant compared to what they spent last year” this is another significant jump from AlixPartners' 2013 study.  In the 2013 study consumers “predicted they would spend 5 percent less during the year ahead.” The restaurant sector suffered year or year customer count loss in 2013 and without price increased same store sales declines for the industry as a whole. 

Molly Harnishfeger, of AlixPartners Restaurant & Foodservice Practice stated. "And the competition won't be coming just from other restaurants, but from convenience and grocery stores as well." Foodservice Solutions® Grocerant Guru added “Drug Stores like Walgreens, Liquor Stores like Pinkies and Food Retailers like Harry & David continue to garner Millennials in search of food discovery.”

Legacy restaurant chains must adapt to the evolving fresh prepared Ready-2-Eat and Heat-N-Eat grocerant niche competition or risk capitulating top line sales, margins, and market share. Convenience stores have been adapting to the evolving retail marketplace faster.  Grocery stores are making headway as well. 

In fact the AlixPartners study found that:

1.       Consumers prefer to visit grocery and c-stores for breakfast 13% of the time;

2.        For lunch, 6% of the time;

3.       For Dinner 4% of the time

4.       For late-night food 24% of the time

5.       For snacks 49% of the time 

There was some good news for the Restaurant sector within the AlixPartners study; 35% of coffee drinkers prefer fast-casual restaurants that place an emphasis on coffee, however c-stores are catching up, going from 17% during the third quarter of 2013 to 21% during the first quarter of 2014. 

There is always some interesting data points in every study that resonate with hands on operators this is one of them. The latest study found that “84% of consumers listed healthy menu options as at least somewhat important to them when choosing where to dine out, but only 20% said such options are very or extremely important.”  Starbucks Howard Shultz stated we tried Gluten Fee and customers did not buy it. 

The Ready-2-Eat and Heat-N-Eat fresh prepared food niche is booming and Foodservice Solutions® Grocerant Guru reminds operators rule one “the food must taste good”.  Selling good food is paramount what is changing are the new points of distributions.  Your food retail competition today can come from anywhere.  Is your company prepared for success in the fast evolving retail food landscape?

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991