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    How One Fast Casual is Going After Grocery

  • Newk's Eatery has a plan to take share from the rapidly growing segment.

    Web Exclusive October 11, 2018 By Amanda Baltazar
    Newk's Eatery
    Newk's is combating the grocery trend with take-home offerings that allow guests to build their own meals.

    As grocery stores launch cafes serving high quality food, one fast casual restaurant is doing the opposite and offering meals to take home and heat.

    Jackson, Mississippi-based Newk’s Eatery, which has more than 120 locations in 15 states, launched its Express Market in June and now offers it at 49 locations.

    The program features an open-air refrigerator filled with five different protein entrees (flash-seared ahi slices; two dozen broiled shrimp; two char-grilled Atlantic salmon filets; 1 pound of sliced chicken), pastas, sandwiches, salads, 12 rotating soups and sides. Also available are dressings and cakes. Newk’s experimented with take-and-bake pizzas but they weren’t successful.

    “So much is moving off premises and we want to give customers the chance to leverage the Newk’s food they love,” vice president of marketing, Michelle Spohnholz says. “We can help people be heroes—they can put dinner together with very little effort. It’s wholesome and has great ingredients.”

    The goal was for these meals to serve two adults and for them to be mix and match. “The idea is to build your own dinner,” Spohnholz says.

    This is a smart move given that grocerants—restaurants within supermarkets offering meals to eat in or take out—generated more than $10 billion in sales in 2016, according to the NPD Group.

    And USDA data analysis shows this is particularly true for millennials, who purchase more prepared foods, pasta, and sweets—foods that require minimal preparation—at the grocery store than any other generation—13.6 percent of their at-home food budget.

    Newk's Eatery

    Express Market is located in Newk’s restaurants in one of two places, always by a door: Either by a separate entrance that’s used for to-go or mobile orders, or by the main door.

    Express expansion

    Newk’s has plans for the program going forward: It hopes to have it in all stores by early 2019. And at around that time, it will launch updated graphics and labels that will “raise the profile of the Express Market,” she says. They will “reinforce the quality and convenience cues that Express Market delivers.” In some cases, they’ll also contain nutritional information, she adds, and will make it easier to see the prices.

    The concept also hopes to start offering small snack boxes containing items like cheese, olives, nuts, fruit, and veggies with a dip or hummus. “We’re looking at healthier options and items that are protein-heavy,” to meet current demands, Spohnholz says. “We are evaluating what consumers might prefer and we’ll start running this test in early 2019.”

    Lunch is the busiest daypart at Newk’s and that’s when stores are seeing the most sales in Express Market. “We want to meet consumer needs where they want to be. People come and eat lunch and buy on impulse on the way out,” Spohnholz says. “Others come in and see there’s a line to dine-in and they take a meal to-go for their lunch.” Spohnholz has even heard of people buying the meals as a gift—for families with a new baby, for example.

    Express Market is located in Newk’s restaurants in one of two places, always by a door: Either by a separate entrance that’s used for to-go or mobile orders, or by the main door. The coolers feature the Express Market name.

    Express Market sales are strong. “The growth in the grab-and-go and the Express Market side of the business is really apparent,” Spohnholz says. “We’re working to hold on to those dine-in customers but more customers are looking for those off-premises dining options. We’re also looking to communicate how to use us differently in our marketing.”

    Grassroots marketing

    The sales vary by location, and mostly it depends on how diligent staffs are at keeping the coolers stocked, she says. “It depends on the leadership and their belief in the program. Those keeping the fridges stocked are seeing sales grow faster. They are really getting the word out in their community about this.”

    The cost to franchises to launch Express Market is low, and, in fact, Spohnholz says, “they are clamoring for it.” The cost mostly comes down to an open air cooler.

    For now, the challenge is getting the word out and since most Newk’s are in urban locations, the brand is taking a grassroots approach. It will be feature a “Do Dinner Easier” campaign via social media, and will educate guests on how to use Express Market, especially for dinner.

    In addition, Spohnholz says, some franchisees are contacting local organizations, such as health clubs, to create awareness for their members that Newk’s is a convenient option for proteins and salads for those consumers looking for freshly prepared dinner solutions.

    Also, Newk’s recently updated its brand images to show a dinner table picture “so at a glance you can see how you can make a meal from these items at home or on your back patio table,” Spohnholz says. “We’ll use some of those images and content to communicate that we have more stores getting into these programs, even if it’s not branded Express Market yet.”

    The images will be used in in-store POP, social media and in Newk’s communication to its loyalty club. They’ll also be featured on exterior restaurant windows in the fourth quarter of this year.

    Customers looking for even more convenience can order Express Market meals online or through Newk’s mobile app.