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America's New Diner

From deli take-out to sit-down restaurants, consumers are increasingly turning to grocery stores for fresh-prepared meals.


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“Good service. Really big portions. Great wine selection, really, and I would totally try their beer and cocktails, as they have a nice happy hour, 12 to 6,” Karen S. of St. Paul, Minn., writes in her three-star Yelp review.

Koolsee X., also of St. Paul, gives the same establishment a coveted four stars: “I only go here for their Sunday brunch. They have $9 unlimited mimosas and Bloody Marys. I really enjoy their omelets. BIG portions for decent prices,” she writes. 

The glowing reviews are not about some new trendy bistro, landmark white-tablecloth steakhouse, or neighborhood hole-in-the-wall seen on Diners, Drive-Ins and Dives, but rather about the Hy-Vee Market Grille at the chain’s Oakdale, Minn., store. The West Des Moines, Iowa-based retailer operates more than 100 Hy-Vee Market Grille full-service restaurants next to its namesake supermarkets. “BTW, the attached grocery store is awesome!” Karen S. notes.

Hy-Vee is just one of many food retailers upping its game in the foodservice arena. In addition to a sit-down restaurant, the chain does an outstanding job of merchandising ready-to-eat and heat-and-eat items in its deli and prepared food cases. It’s an astute move, says Steven Johnson, “grocerant guru” at Consultancy Foodservice Solutions in Tacoma, Wash.

“Many legacy retailers still want to focus on selling pantry products, and today’s customers simply are not stocking the pantry,” Johnson says. “They don’t plan one month out at a time. It just doesn’t happen anymore.”

When it comes to share of stomach, the growth of retail foodservice programs has been nothing short of phenomenal.

“Measuring growth from 2015 to 2016, we find that supermarket foodservice is the top-growing segment in the restaurant industry,” says Aimee Harvey, managing editor, Retail Foodservice and foodservice editor, CSP, at Technomic, a Chicago-based sister company to Grocery Headquarters. “We’re talking about 8.6 percent growth in 2016 sales. That is outpacing restaurant categories, like fast-casual, which had a 7.5-percent sales growth; fine dining, which had 5.2-percent growth; and fast-food and full-service restaurants, which saw nearly 4-percent growth.”

Harvey attributes the growth to the fact that supermarkets are “really nimble” at adjusting to current market trends. “Supermarkets are introducing delivery and testing meal kits,” she says. “They are becoming a lot more flexible, and with foodservice, supermarkets really create a destination with restaurant-type amenities in the perimeter of the store.”

Retailers are also expanding their foodservice cred with signature dishes and expanded menus, including offerings for all dayparts.

This month’s cover story takes a closer look at a cross-section of retailers from around the country that are excelling with foodservice programs, including: Bristol Farms; Brown’s Super Stores’ newest store addition, The Fresh Grocer of Monument Road; Lunds and Byerly’s; and Niemann Foods’ Harvest Market.

The Fresh Grocer of Monument Road

Brown’s Super Stores, a Westville, N.J.-based operator of 11 ShopRite supermarkets in greater Philadelphia, recently debuted its second store under the Fresh Grocer banner on Monument Road in the City of Brotherly Love. 

Housed in a former Pathmark, the 55,000 square-foot space was extensively renovated into an emporium showcasing the latest concepts in layout, design, equipment, fixtures – and prepared foods.

A highlight of the Monument Road Fresh Grocer is Brown’s Chef’s Market, which offers a wide variety of signature specialties, including: fire-grilled chicken; sticky ribs; Southern fried chicken and fish; Chinese dishes including sushi; and an extensive, well-stocked soup and salad bar.
While many get their foods to go, others sit down and enjoy them in front of the store’s fireplace, and take in the architecture’s natural wood and brick elements that convey a pleasant, upbeat vibe.

In addition to restaurant-quality entrees at affordable prices, many of the most popular items sold in Brown’s ShopRite stores can also be found at the Monument Road Fresh Grocer, including the famed, made-from-scratch sweet potato pie.

Another highlight is a beer garden with extensive craft beer options and various wine selections that are available for consumption in either the store’s indoor and outdoor cafes, or at home.

Trial and error has factored heavily into Brown’s Super Stores’ evolving retail foodservice strategy, which he emphasizes, cannot be approached with a “one-size-fits-all” mentality.

“Our stores are in diverse areas – some are in urban locations and others are in the suburbs – and homeruns in one store does not make for a homerun in another,” explains Jeff Brown, president/CEO of Brown’s Super Stores, which consists of 11 Philadelphia-area ShopRite supermarkets and two Fresh Grocers.
Aside from rotisserie chicken – which is universally popular in all of Brown’s stores – menu options must be fine-tuned to the tastes and preferences of consumers on a location-by-location basis. For example, Brown cites a wildly popular fire-grilled chicken – which is bathed in a special marinade for 24-hours and cooked directly on the sales floor – that’s become the top signature item in the Monument Road store.

“It’s a fantastic product, and our urban customers love it. But our suburban customers have no interest.” Be it the $1 higher price tag or a general indifference to try something new is beside the point, notes Brown, who says what’s most important is to select signature items specifically for the local audience.  
Another key to Brown’s Super Stores’ success with retail foodservice is giving it a unique brand that is different from the overall store. “The branding of your foodservice offerings needs to be somewhat differentiated than your overall store,” in order to help give it its own personality that reflects its offerings. “Our stores’ overall brand generally equates with price and variety and value, which are not necessarily the same features you want your in-store restaurants to stand for.”

— Meg Major

Wegmans

What do Wegmans and a five-star restaurant have in common? Patrons who are willing to drive 30 miles or more to enjoy a meal. The major difference, however, is that diners do not require a reservation to visit the Rochester, N.Y-based retailer’s restaurants and prepared foods concepts. However, it’s still advisable to arrive early, as the chain’s store-prepared daily dinner specials featuring a choice of three entrees and two sides sell out quickly.

Almost half the selling space of Wegmans’ expansive stores – averaging over 100,000 square-feet – are devoted to perishables and prepared foods. Salads, entrees and side dishes are prepared in-house, as is the oven roasted real turkey breast in the deli department. The in-store bakery spans a full aisle and includes a bodacious selection of decadent pies, cakes and pastries.

Wegmans operates several restaurant formats. One unique concept is Next Door by Wegmans, located across the street from its Pittsford, N.Y., flagship store, just outside Rochester. At Next Door, all-natural, sustainable and organic ingredients from the store are selected by its chefs and prepared in a delicious and healthy manner.

Sample dishes include an appetizer of Wegmans Organic Mussels ($12.00) in cucumber & coconut milk broth, with ginger, lemon balm, spearmint and couscous; and an entrée of Filet of Beef ($39.00) with crispy peewee potatoes, beech mushroom, Wegmans Organic Farm roasted beets and red wine reduction.

Buehler’s Fresh Foods

What do you call a hamburger patty topped with a fried egg, bacon, cheddar cheese and hash browns, served up on an inside-out glazed doughnut? Breakfast – if you’re dining at one of the restaurants of Buehler’s Fresh Foods during the month of August.

Long before McDonald’s made all-day breakfast a national phenomenon, the Wooster, Ohio-based Buehler’s, operating 13 stores throughout Northern Ohio, was offering round-the-clock breakfast for years. The regional retailer is famous for its Grandma Buehler’s made-from-scratch buttermilk pancakes, as well local favorites, including ham loaf, meatloaf, fried bologna, and an all-you can eat fried or baked fish meal on Fridays for only $12.99.

In addition to its sit-down restaurants, Buehler’s offers an extensive selection of prepared foods on the supermarket side of the store, including a Smokehouse BBQ in each location offering up pulled pork, smoked chicken, brisket and its famous smoked mac and cheese. Homemade soups are available both hot and chilled in pouches to heat up at home, while the chain’s chicken program uses local Gerber’s Chicken for its fried, roasted and smoked offerings. Take-out Chinese, Stonefire pizza, subs and sushi are also part of its extensive prepared foods program.

Harvest Market, 
Niemann Foods 

Niemann Foods’ Harvest Market in Champaign, Ill., which opened a little over a year ago, puts fresh prepared foods front-and-center, and customers are eating it up. The unique store focuses on the farm-to-table movement to connect consumers with the producers of their food. One of the biggest draws in the 58,000 square-foot showplace is the USDA-certified butter-churning room – a first of its kind feature for a grocery store.

As Niemann’s first foodie-focused market, and the chain’s first to include a restaurant, named The Farmhouse, the menu is guided by a professional chef and offers breakfast, lunch and dinner options made with locally-sourced ingredients. The Farmhouse’s selections boast from-scratch, authentic food, which has been extremely well received by an appreciative base of loyal enthusiasts who happily share feedback with the store’s culinary teams.

 “Consumers help guide our menu, which plays heavily off peak-season specialties and farm-fresh ingredients sourced by local food makers and producers,” explains Gerry Kettler, director of consumer affairs. Harvest Market also showcases signature products made with ingredients found throughout the store, including artisan breads and pastries, in-house roasted deli meats, Heritage-bred pork and Niemann Ranch Beef.

While the restaurant’s menu changes with the seasons, Farm House sticks closely to its roots with authentic Midwest foods and flavors, kicked up a notch with new tastes and ingredients to make the dining options that much more interesting.

Meanwhile, over in Harvest Market’s in-store Kitchen, shoppers can savor the aroma and select from a wide variety of fresh food simmering on the stove, including a large selection of made-to-order, fresh prepared foods. The store also features a sit-down cafe where diners can enjoy a wide variety of beverages and fresh brewed coffee.

Another aspect of Harvest Market’s food-centric mission, adds Kettler, is evidenced in The Nook – an instructional and educational space which houses many types of events, such as food demonstrations, taste-testing and cooking classes. Interestingly, Kettler says the twice-weekly cooking classes, priced at $10 per session, have been wildly popular with customers –  so much so that they’re sold out two to three months in advance.

“Whether it’s in our restaurant or cooking classes and everything in between,” Kettler says Harvest Market’s commitment to imparting “intimate food knowledge” has been a transformative experience for the entire company. “We’re exploring all different types of products and approaches that have given us a whole new perspective.” ­­
— Meg Major

New Seasons Market

“Fresh” is the word at Portland, Ore.-based New Seasons Market, an operator of 20 supermarkets in Oregon, Washington and Northern California, with another four locations underway. It would be a good idea to throw in “mind-boggling” too.

“To ensure customers have lots of options, New Seasons’ stores have anywhere form 70 – 130 dishes every day, depending on each unique location,” says Tracy Hardin, group director of merchandising for deli and bakery. Depending on location, food is prepared by the chain’s very own chefs from scratch at its central kitchen and on on-site in each store, Hardin adds.

“Customers can choose from inventive New Seasons chef-prepared offerings, unique to every store,” relays Hardin. “Some examples include ramen and hot wok bars, self-serve salad bars, hot bars with new options daily, made-to-order sandwiches, or a Latin American grill featuring Arepas. New Seasons also offers Certified Organic and Non-GMO Project Verified breads baked daily, and well-stocked grab-and-go options at all of our stores. Customers can take all of it to go – or stay and enjoy indoor and outdoor seating. At some stores, there’s even the option to enjoy it alongside a pour of wine or beer.”

“You go into New Seasons, you see the same people coming in, different dayparts, day in and day out, for breakfast, lunch and dinner,” says Johnson. “They also tout the local, telling you which meat and produce came from this farm, we use these eggs, etc. That makes a real difference to the consumer. They know it is fresh. They know it is local. That gives it a halo of better-for-you.”

Lunds & Byerlys

In a market known for its upscale food offerings, Lunds & Byerlys has carved out a niche for itself as not only one of the top foodservice purveyors in the Twin Cities, but in the entire country. The Edina, Minn.-based chain operates 26 stores in the greater Twin Cities as well as St. Cloud, Minn. Known for its carpeted floors and meticulous appearance, it is the prepared foods offerings that really draw shoppers in.

The chain’s store on France Avenue in Edina, for example, features store-baked scratch breads, and the Byerly’s Creations Café, a massive aisle lined with stations featuring: rotisserie meats and vegetables; artisan sandwiches; made-to-order pizza and pasta dishes; fried chicken and macaroni and cheese; salad bar; signature house-made desserts; and outposts of local restaurants Big Bowl Chinese Express, Hissho Sushi and Tucci Pronto, as well as an outpost of Caribou Coffee. 

“It is a good idea to team up with someone else and let them run some of the operations for foodservice,” says Johnson. “Lunds & Byerlys is doing a great job. They offer a great selection, are middle of the road on price, and really doing an excellent job.”

After ordering a meal downstairs, many shoppers opt to climb the flight of stairs or take the elevator to The Mezz – the store’s second-floor seating area. The Mezz not only offers seating, but also a full-service bar, along with a fireplace and an outdoor deck overlooking busy France Avenue that has become a meeting place for the residents living in the mixed-use apartment complex surrounding the store.

Consumers living outside of the Twin Cities can also enjoy a taste of Lunds & Byerlys, as the chain’s famed homemade soups, are available frozen nationwide. 

Bristol Farms

In Hollywood’s Golden Age, Chasen’s was the place to be seen for anyone who is anyone in Hollywood, with Elizabeth Taylor, Frank Sinatra and Ronald Reagan listed among its regulars. The famed West Hollywood eatery closed in 1995, but in 2000, Bristol Farms opened a branch at the site, preserving the building exterior as well as several of its banquet booths, now serving as seating for its café operation. They are well utilized as the 11-unit Carson, Calif.-based chain has been awarded several accolades by local publications, including Best Small Market, Best Deli, Best Sushi, Best Meat and Best Cooking School.

Bristol Farms’ sushi experts offer 30 types of freshly prepared sushi, made around the clock, using the highest quality ingredients, including Japanese Hamachi yellowtail and the store’s own famed buttery salmon sashimi, made in-house from large fillets containing high amounts of fish oils that are cured in salt and vinegar and then frozen for a minimum of 24 hours. In addition, the Bristol Farms Sushi Kitchen offers a variety of fully-cooked teriyaki bowls featuring grilled beef, chicken breast and salmon atop a bed of hot, steamed rice drizzled with homemade sweet teriyaki glaze.

“At Bristol Farms, their prepared foods and ready-to-eat foods are nice,” says Grocerant Guru Johnson. “Their service and quality are consistent.”    
Founded in Rolling Acres, Calif. In 1982, today Bristol Farms operates 11 stores (its lone Northern California store in downtown San Francisco closed in January), with a 12th location opening on Mulholland Drive this fall.  

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