Bistro in Aisle 9: Supermarkets mimic restaurants

http://finance.yahoo.com/news/Bistro-in-Aisle-9-apf-1703193215.html?x=0&.v=2



Bistro in Aisle 9: Supermarkets mimic restaurants
Leave the cart, eat the cannoli: Supermarkets acting more like restaurants

Michael Hill, Associated Press Writer, On Thursday June 3, 2010, 11:57 am EDT

Just beyond the canned goods and produce aisles where he usually grabs his groceries, Jack Curtin recently grabbed a pub lunch.

He started with the chicken breast sandwich special and a nice Belgian ale. His ex-wife had the crusted Atlantic salmon fillet. And they did it without ever leaving the store.

They were in "The Pub at Wegmans" in Collegeville, Pa. And the pub was in a Wegmans supermarket.

And it was all pretty good.

"Let's put it this way," says Curtin, who writes professionally about beer, "if I were shopping and a felt like having a beer, I would have no compunction about walking over there, sitting at the bar and having a beer."

And he can largely because the hugely popular grocery store salad bars of the '80s and '90s have given way to a more sophisticated approach to prepared foods. Shoppers now can dine in on sushi and chardonnay, or grab crusted salmon and grilled chorizo to go.

The grocer-as-quick-serve-restaurant model has done well in the recession, in part because the convenience is good and cost is low.

But even as the economy upticks slightly, ready-to-eat food continues to drive more traffic to grocery stores, increasingly blurring the traditional boundaries between supermarkets and restaurants.

"We don't want you coming to the store once a month, or once a week," says Jim Berndt, Wegmans Food Markets senior vice president for prepared foods, deli and specialty cheese. "We want you coming three or four times a week."

The prepared supermarket food available today is a far cry from the modest offerings of fresh coffee, potato salad and rotisserie chickens of years past. Many supermarkets now even make their eating spaces as inviting as possible with cozy chairs, faux-wood floors and unsupermarket-like soft lighting. They are hiring chefs, and the variety of supermarket eat-in or takeout food is unprecedented.

Wegmans, a five-state chain based in Rochester, N.Y., runs its full-service pub north of Philadelphia inside an existing sit-down area called the Market Cafe. Market Cafes are common in Wegmans stores and feature pizza, sushi bars, burrito bars, Thai food and vegetarian options to eat in or takeout.

Kroger, the nation's largest traditional grocer, has been removing underused salad bars to make space for prepackaged foods like sushi and carnitas. They also have The Bistro at Krogers featuring the likes of tilapia and pork loin. Roche Bros. stores in the Boston area offer meals like steak tip dinners ready for the microwave. If customers don't want to leave home, they can get it delivered.

Whole Foods Market, the natural and organic foods grocer, has pushed the prepared foods concept as far as any chain. Stores offer chicken fried tofu, press-to-order paninis and wheatberry quinoa Waldorf salad. Its flagship store in Austin, Texas, has wine for drinking either in or out of the store, a barbecue station and a place to have food enrobed in chocolate. Shoppers there also can buy a fresh fish, take it to the seafood restaurant 20 feet over and ask them to cook it for takeout.

Industry analysts say prepared foods are a growth area for many chains. Supermarkets saw a 1 percent increase in sales of takeout eaten at home for the year ending in March, even as total restaurant industry traffic was down 3 percent during the same period, according to The NPD Group, a Port Washington, N.Y.-based market research firm.

"This is something that had been happening prior to the recession, and it has only gotten exacerbated by the recession," says NPD Group restaurant industry analyst Bonnie Riggs.

Riggs expects supermarkets to continue to see decent takeout business as the recession fades, largely because NPD projects takeout meals eaten in-home will grow by 20 percent during the next decade.

Peter Romeo, a restaurant trade publication veteran and blogger at Restaurant Reality Check, says industry executives have been looking over their shoulders for decades at the looming threat posed by supermarkets. But he says it never really came until the recent profusion of more sophisticated fare.

"The big change in the last couple of years is that supermarkets have cracked the quality code so they're able to offer a restaurant-quality meal at a price that is usually lower than restaurants," Romeo says.

Consider that Sam's Club recently retailed a ready-to-heat 16-inch cheese pizza for $6.48, several dollars below the price at many pizzerias. Roche Bros. offers its steak tip dinner for $9.99, a price very competitive with casual dining chains.

Industry analysts say consumers often believe -- true or not -- that prepared supermarket food sold amid fresh produce and meats is fresher and healthier than restaurant fare. Supermarkets also can offer a more convenient choice for parents heading home from work, especially if they're already picking up groceries.

Restaurants are taking notice.

At least one private analyst suggested restaurants respond by promoting their strengths, such as quality food and service. Romeo noted that almost all the major casual dining chains now have curbside takeout, a move he said is partly driven by supermarket competition.

In December, Bob Evans opened a "Taste of the Farm" retail area connected to its restaurant in Westerville, Ohio, where customers can pick up a hot spaghetti dinner, a salad or -- talk about blurring boundaries -- Bob Evans-brand grocery products.

Company president and chief concept officer Randy Hicks says the retail centers fit customers' busy lifestyles. More are planned.

Despite the recent trends, a spokeswoman for the National Restaurant Association says she didn't expect customers to abandon restaurants any time soon. Maureen Ryan says the industry group's research shows that more than a third of adults say they don't eat out as much as they'd like too.

"What the restaurant industry has to offer that the supermarkets don't is the experience of excellent service, in many case a wide variety of menu options," Ryan says. "And that's something you can't get in a supermarket.