Astute restaurant owners know other restaurants are not their only competition. There are many other businesses attracting ‘would-be takeout customers’ from restaurants. Among them are local supermarkets and convenience stores.
People spend a lot of money on dining out. In fact, for the first time in history, Americans are spending more at restaurants and bars than they are at grocery stores. According to Quartz, “retail sales at U.S. eating and drinking establishments have outrun those of grocery stores [over the last year], upending a longstanding pattern in which the bulk of American spending on food occurred at the supermarket.”
While customers are still purchasing items at grocery stores, many of their purchases are being made in the prepared food section, instead of buying whole/raw ingredients. Business Insider reports that millennials, in particular, are spending their money at grocery stores offering freshly prepared, restaurant-quality meals. Furthermore, according to a report by NPD Group, the consumption of prepared foods from grocers has grown nearly 30% since 2008.
Second, you have to battle convenience with convenience. This is why mobile ordering is so important. Customers need to be reminded that ordering from your restaurant is easy and accessible.
So, how do you compete against that level of convenience from savvy supermarkets? Well – it’s an interesting challenge, and quite frankly, can be hard, but it’s not impossible.
First, think about what you have on your side. Most customers carry a perception that restaurants can provide a higher quality meal (and hopefully better value) than a grocery store selling pre-packaged meals (a.k.a. “Home Meal Replacements”). This is especially true if your restaurant offers unique menu items.
Second, recognize that convenience is the top reason people order online. So, spread the news about your convenient mobile ordering and remind customers your food is high quality. Stress the fact your online site offers access to your full menu (compared to a very limited supermarket menu) and make pickup easy for customers coming to your restaurant to get their order.
Jon Luther, chairman of Dunkin’ Brands, once described supermarkets and C-stores as “the new elephant in the room” for restaurants, according to Restaurant Retailer News, and reminded restaurant owners: “You (supermarkets and c-stores) win people with service and convenience…”
Restaurants just have to do it better.