Why grocers need to act like restaurants
Just like restaurants, food retailers should be thinking about offering foodservice delivery as a way to overcome stagnating customer traffic.
Despite the overall weakness in the U.S. restaurant industry, foodservice delivery posted sizable gains in both visits and sales over the last five years, reports The NPD Group. The 20% increase in delivery sales and 10% gain in delivery foodservice visits were supported in large part by the growth of digital ordering, which now represents over half of all delivery visits.
“Delivery has become a need to have and no longer a nice to have in the restaurant industry,” says Warren Solochek, senior vice president, industry relations. “Restaurants need delivery in today’s environment in order to gain and maintain share. It has become a consumer expectation.”
Consumers are so accustomed to ordering delivery that they are ordering it at breakfast and lunch in addition to dinner, which historically has been the most popular daypart to order it, according to NPD’s new study, Future of Foodservice Snapshot: Restaurant Delivery. Growth of delivery at dinner has remained flat over the last five years and has grown at breakfast and lunch.
The report’s conclusions reinforce the shifting trends in consumer behavior as the ease of online shopping and meal delivery have taken a bigger bite out of retail sales. Retailers looking to grab back some of this share should be offering delivery of hot and cold prepared foods to customers. It's not just laundry detergent or canned tomatoes that shoppers are looking for via online delivery. They also want the grocery store to act like a restaurant. They want to be able to place an order the way they would from a restaurant: a hot, restaurant-style meal for a family of four.
Although digital ordering is a major contributor to the growth of foodservice delivery, using the phone to order still represents 49 percent of delivery visits. Third party delivery services, like UberEats, Grubhub and DoorDash, account for much of the digital delivery growth; however, the share of digital delivery by third party services is more than double among full service restaurants than quick service outlets, finds NPD’s restaurant industry trends.
“Convenience is among the chief reasons why consumers visit restaurants and delivery brings a heightened level of it,” says Solochek. “We forecast that delivery will grow over the next five years and the growth will source to non-traditional delivery outlets and dayparts.”