Grocerant is a new term, which describes what smart grocery stores have become. At such places, shoppers not only stock essentials, but also buy high quality prepared meals that can be taken home or eaten at the location, writes TONIA ‘DIYAN
Food trends are difficult to follow these days. Just like hip sectors, the food industry is coming up with its peculiar lingo when describing market shifts.
One of the latest examples is “Grocerant,” a word combining “grocer” and “restaurant.” The term has been around for a few years, but it seems to have gone mainstream in recent months. Or at least, it’s a term people will be hearing more often.
But as trendy as it is, the term “grocerant” is quite relevant and accurately captures what is happening in the food industry these days. In short, a grocerant is a grocery store, which sells prepared meals to either be eaten at locations or taken home.
Given that convenience seems to have more currency than ever before, two worlds are colliding in the ready-to-eat space at grocery stores, which caters to people seeking portable solutions to accommodate their hectic lives.
Grocerant offers a one-stop-shopping solution for consumers driven by either curiosity or a lack of time. An increasing number of grocery stores now allow customers to buy and eat on the spot. Examples of such stores are Shoprite and SPAR.
Some stores in Canada and the United State (U.S.), including several independents such as Longo’s and even larger outfits, such as Loblaw, Sobeys and Metro, merge food retailing and food service under one roof.
When grocery stores challenge restaurants
Research suggests that many consumers perceive grab-and-go food products to be healthier than meals that can be gotten at a restaurant. This works well for grocers.
Price wars constitute the other driving issue for grocers. Over the last 15 months in Canada, food retail prices have barely moved. But the price of food purchased at restaurants has increased significantly, more than double the general inflation rate.
This would suggest that menu prices are much more immune to market cycles than retail food prices. Demand in food service is inherently more inelastic, so margins can be kept up and defended in most cases, no matter what the economy is doing.
But restaurants aren’t staying quiet in the face of this new trend.
Restaurant operators are fighting back by using technology to their advantage. Many are responding by using certain Apps and other food delivery services, they are even expanding their market by offering meal kits and developing new ways to reach consumers.
In other words, they are trying to go where the money is instead of just waiting for the consumers to come to them.
Some say it’s all about millennials. It is, indeed, about offering fresh, healthy, reasonably priced products for the largest generation that is slowly taking over the economy.
But the changes are more deep-rooted, beyond just millennials. Millennials certainly have the economic influence to trigger the changes we’re seeing, but many demographics are behaving differently around food.
Families with older children like the enhanced grocerant experience for convenience. The appeal is across the board. The rise of the grocerant represents the awakening of an industry that’s been complacent for quite some time.
Grocers do have the capacity to cover a broader market with their product offerings, but have not yet made much of a play on meal delivery and quality.
Grocery chains, in fact, are often not hardwired to meet new challenges. But that’s slowly changing.
So, the convenience food battle is alive and well. Grocers were losing for a while, but the emergence of grocerants across the country is a sign that the industry is listening to what the modern consumer is telling them.