Industry News | June 21, 2012

Restaurants Feeling Heat From Retail Competition

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Restaurants and retailers have a long history of competing over consumers' share of stomach. That competition becomes particularly intense late in the day, when busy families must decide what's for dinner. If money is tight, retailers often win the family dinner battle by offering appealing ready-to-eat, center-of-plate options, easily paired with sides. 

"It's true that the economic conditions of the past two years shifted a lot of business away from restaurants," says Ron Paul, president of Technomic, a Chicago-based research and consulting firm that has extensively studied key players and developments in the Retailer Meal Solutions (RMS) segment.

"Many restaurants need to adjust the value equation back in their favor," says Paul. "Even though retailers are increasingly successful at matching the quality of restaurant food, some restaurant chains are aggressively challenging retailers on price." 

Recent examples include:

  • Mimi's Cafe rolled out a Family Meals To Go menu with 10 meal options serving four to five for $24.99. Each meal comes with a choice of soup or salad; additional family-size sides can be added for $3, $4, or $5. 
  • Bob Evans' 10 Under $20 Family Meals To Go include an entree, a large side, and fresh-baked bread for three to four diners. The meals are only available for takeaway. 
  • Wienerschnitzel promoted several Family Combos for $9.99. Initially offered last month, the meals are available at participating locations for a limited time. 
  • In April, Buona Beef invited e-club members to try its new Family Meals for a special limited-time price of $13.95. 

 

In light of the important competitive dynamics between restaurants and retailers, and significant innovations in retail foodservice, Technomic is updating its 2007 landmark study of the segment. Foodservice suppliers will learn the "size of the prize" for their products and critical success factors for effectively targeting opportunities. Restaurants and retailers will gain extensive insights on consumer preferences, behaviors, and needs regarding retailer meal solutions.