Grocery Foodservice Embraces Technology, Speed

Stores have multiple opportunities to leverage the $13 billion foodservice at retail category.

September 06, 2019

ARLINGTON, Va.—Retailers have numerous opportunities to capitalize on foodservice, according to the annual assessment of the category by the Food Marketing Institute (FMI). The $13 billion foodservice at retail category is growing at 8.2% yearly clip, as grocery stores aim to differentiate and appeal to convenience-seeking consumers.

FMI’s 2019 Power of Foodservice at Retail finds that 63% of consumers continue to incorporate time-saving solutions in the form of semi- and fully-prepared items for dinner, but opportunities still exist for grocers to garner greater visibility as the primary dinner solution. Survey participants offered feedback for their stores to focus on faster service; more cuisine variety; healthier dishes as well as healthier alternatives to current options; competitive prices; more information; freshness; knowledgeable and available staff; and various operational improvements such as cleanliness and in-stock performance.

“The study notes that grocers with a positive reputation in retail foodservice can serve as strong motivation for 64% of shoppers who say they will actually go out of their way to find these stores,” said Rick Stein, FMI vice president of fresh foods, in a press release. “Competitive differentiation strategies abound for our grocery members who place an emphasis on variety and reduce obstacles through fast and convenient shopping experiences. These experiences may also be enabled by technology, as we’re witness to similar motivations in the restaurant industry.”

Eighty-eight percent of shoppers want to see more new items and flavors in retail foodservice. In fact, the most frequently mentioned word in the open-ended suggestions of the survey was “more” in combination with words such as variety, food, options and items. The highest share, at 31%, want to see flavor and item rotation on a monthly basis, but 28% want even greater levels of innovation and recommend a weekly or even daily rotation.

The importance of speed is also once more underscored by the grab-and-go, ready-to-eat format being the most popular method, which is of interest to 68% of shoppers. Grab-and-go, heat-and-eat is the second most popular style, at 63%. 

While 57% of shoppers have grocery store apps downloaded, 42% actively use one or more. App usage is highly related to checking weekly specials (78%), online ordering of groceries (53%), getting recipes and meal ideas and researching the deli-prepared foods menu. Meanwhile, foodservice orders lag at 38%.