Retail vs. restaurant competition heats up

June 21, 2012

The daily mealtime competition between restaurants and retailers has become more intense in the past two years, as economic conditions have affected restaurants and retailers have added higher quality options.

According to new research from Technomic, the competition becomes particularly intense later in the day, when busy families are deciding on what to eat for dinner. If money is tight, retailers often win by offering ready-to-eat options that are easily paired with sides.

"It's true that the economic conditions of the past two years shifted a lot of business away from restaurants," said Ron Paul, president of Technomic. "Many restaurants need to adjust the value equation back in their favor. Even though retailers are increasingly successful at matching the quality of restaurant food, some restaurant chains are aggressively challenging retailers on price."

Technomic points out recent examples such as:

  • Mimi's Cafe rolled out a Family Meals To Go menu with 10 meal options serving four to five for $24.99. Each meal comes with a choice of soup or salad; additional family-size sides can be added for $3, $4 or $5.
  • Bob Evans' 10 Under $20 Family Meals To Go include an entree, a large side and fresh-baked bread for three to four diners. The meals are only available for takeaway.
  • Wienerschnitzel promoted several Family Combos for $9.99. Initially offered last month, the meals are available at participating locations for a limited time.

Additionally, pizza chains have introduced value combo deals. In February, Pizza Hut launched a $10 dinner box, with a pizza, breadsticks and cinnamon sticks. Domino's just rolled out its "Perfect Combo" for $19.99, which includes two medium one-topping pizzas, a two-liter Coca-Cola product, a 16-piece order of Parmesan Bread Bites and an eight-piece order of Cinna Stix.

In light of the competitive dynamics between restaurants and retailers, and significant innovations in retail foodservice, Technomic is updating its 2007 study of the segment.

Read more about trends and statistics.

Topics: Food & Beverage , Operations Management , Trends / Statistics

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