This was the key message at a conference organised by The Grocer, called The Future for Retail and Foodservice, in London. Speakers at the event, which brought together more than 100 top names from both sides of the food and drink divide, agreed that the potential for crossover was huge.
Cliff Burrows, senior vice president and UK MD of Starbucks Coffee Company, which opened its first Sainsbury outlet four years ago, said: “The whole area is growing. When we started with Sainsbury, some worked and some didn’t. But now, some are among our top performers.”
Simon Burdess, category manager of M&S’s Eat In, said
the chain’s 187 in-store Café Revive cafes now turned over £105m a year, but said that the real benefit was the “halo-effect” on shoppers’ “dwell time”.
He added: “We’re about 30% of the way there: 30% are doing a cracking job, 30% are doing okay and 30% need some work.”
Retailers were not realising the full potential, agreed Bhasker Dhir, MD of brand developer Selections. “The key is to look at how customers behave. That’s something that the supermarkets haven’t got their heads around.
“They take the view that it’s better for shoppers to shop when they’re hungry, so better locate the foodservice offer behind the checkout. But that doesn’t necessarily fit in with what foodservice is about.” He added that it was OK for retailers to charge more for foodservice than retail goods, but they had to take care not to move too far from their core price position.
Andy Thornton, MD, of consultancy SRCG, said UK chains had “a long way to go to be best in class” in this area. He pointed to the success of US chain Wawa, Japanese chain AMPM and Irish chain Fareplay.
The main opportunity was chilled ready meals appealing to a young upmarket demographic, said Ed Garner, communications director, TNS Superpanel.
There were also opportunities in wholesale, said Richard Maude-Roxby, MD, Maude-Roxby Associates. “My money is on a grocery multiple entering foodservice sooner rather than later. An acquisition would be the logical first step. The option would be to consider picking a fresh produce or meat operator.”