From grocery stores to supermarkets to convenience stores, retail foodservice operations must continually evolve to meet changing demands. With rising generations taking hold, global uncertainty and increased digitalization, it’s becoming even more crucial for these operations to modernize and stay ahead of the curve.
This article provides a quick look at industry challenges and the emerging trends that many retail foodservice operations are already starting to leverage today.
Key takeaways:
- The retail foodservice industry faces challenges around changing customer preferences and purchase patterns, supply chain issues and technology.
- Customers crave healthier options, global flavors and convenient, ready-to-eat meal options.
- Grocery and convenience stores must strike the right balance between price and quality to meet consumer expectations in the age of “value shopping.”
- New technologies and automated solutions are helping retailers optimize efficiencies in addition to better forecasting and managing inventory.
Navigating industry challenges
While shoppers are back in stores and many retailers have found ways to navigate changing and hybrid (physical and digital) landscapes, the retail industry has three key hurdles ahead.
Changing preferences
There is a growing trend toward convenient and ready-to-eat meal options. Striking the right balance between price and quality is crucial to meeting these expectations.
Supply chain
To avoid overstock or low inventory and ensure consistent quality, develop strategies to manage inventory and maintain a reliable supply chain effectively.
Digitalization
Beyond investing in advanced technologies, it’s vital to prioritize training staff, ensuring data security and protecting customer privacy.
What’s trending in retail foodservice
Whether you’re in the market for new, innovative foodservice equipment and supplies or simply looking for ways to optimize your operation, here are seven trends to keep in mind for grocery and convenience store operators.
Serving food on demand
Customers are looking for fast, friendly food options like made-to-order (MTO) meals, meal kits and meal shortcuts. Provide easy access to freshly prepared meals and ingredients with foodservice counters and a strategically designed floor plan.
Solutions to consider:
- Offer pre-packaged entrees, sides, salads and desserts for easy pick-up or pre-order for consumers who want to assemble their meals without the hassle of prep. Stock pre-cooked vegetables, portioned proteins, seasonings and sauces. Accomplish it all using cook-chill tools, such as tumblers, compact blast chillers and sous vide equipment.
- Add large-format temperature-controlled display cases to show off meal solutions. If investing in upscale, merchandisable cases isn’t possible now, consider converting an unused self-service hot/cold bar to stock with pre-packaged goods.
Shopping for value
With inflation and rising food prices, customers crave value. However, this doesn’t just mean the lowest price point since many customers still demand quality products. To incentivize customers, grocery retailers can expand their private-label alternatives and explore new revenue models, such as subscription services.
Keeping things convenient
The emergence of “omnichannel retail” combines physical and online shopping for the ultimate convenience. According to NielsonIQ, online grocery shopping will continue to grow after seeing an almost threefold increase in 2024 compared to 2023. Designing a space and a menu to meet this growth will set retail operations up for success.
Solutions to consider:
- Add temperature-controlled holding cases or even more tech-forward food lockers in a convenient location for drivers or consumers.
- Ensure menu offerings accommodate wait times and reheating with solutions like combi-ovens or ovens with pulse-heat technology.
- Install self-checkout kiosks and mobile payment systems to help expedite the purchasing process.
Tapping into data
The best way to understand customer purchase patterns and inventory demand is to look at the data. Enhance customer experiences by analyzing what customers buy and when to help keep the right amount of products in stock and put them in the best places to sell. Plus, retailers can leverage data to tailor product recommendations and promotions, increasing traffic and sales.
Harnessing advanced technology
Investing in new and innovative foodservice equipment and technology can improve operational efficiency and food quality while maximizing energy consumption and labor demands. AI and predictive maintenance are helping many retail operations improve inventory and forecast demand efficiently. Automation and robotics are helping enhance customer experience and support employees. It’s a win-win.
Solutions to consider:
- Utilize multi-functional cooking equipment like conveyors or multi-cook ovens that can handle different temperatures and foods at the same time.
- Implement intelligent kitchen appliances and pre-programmable equipment like combi-ovens with remote monitoring capabilities to streamline operations further and reduce waste.
- Leverage automated solutions like robotic arms and autonomous mobile robotics (AMRs) to streamline inventory management and restocking.
Introducing micro-fulfillment centers
Online ordering steadily continues, especially in urban and populated areas. To meet this demand, grocers are turning to micro-fulfillment centers (MFCs) as part of their fulfillment strategy. Micro-fulfillment centers are automated mini-warehouses that cater exclusively to online grocery orders. They enable fast and efficient home delivery or curbside pickup for added customer convenience and ease.
Satisfying diverse palates
With the uptick in consumer cravings for global flavors and healthier options, many operations are seeking ways to satisfy different preferences and diverse palates. Providing healthier options and prioritizing nutritional quality and transparency can attract health-conscious consumers. In addition, partnering with local suppliers or expanding cultural food options can attract new customers.
Solutions to consider:
- Gen Z and Millennials frequently purchase foods with organic and natural ingredients, from grass-fed beef to cage-free eggs. Many of these ingredients require more refrigerator space and specialty storage solutions that wick moisture and prevent spoilage.
- Facilitate fresh but fast bites by adding ventless equipment in smaller areas or non-traditional spaces. Ventless ovens can roast, sauté and fry for quick, high-quality items like empanadas, buffalo cauliflower or tapas-style dishes.
Looking ahead for retail foodservice operations
Technology, equipment and innovative practices will continue to play a significant role in shaping the future of retail foodservice operations. Businesses that adapt early to the latest trends will stay competitive and set the bar for what’s to come.
If you want to learn more about the leading and latest commercial foodservice equipment, supplies and technology solutions, you belong at The NAFEM Show. Join us where perfect plates meet profitability – and push your operation forward.
This article includes compiled information from various sources:
“9 Grocery Retail Trends in 2024”, Oracle, 2024
“The 2024 Foodservice Report”, CStoreDecisions, 2024
“How foodservice is reshaping the retail experience”, National Retail Federation (NRF), 2023
“3 Types of Multitasking Equipment You Need”, The NAFEM Show, 2024
“New Survey Data Show Online Grocery Shopping Prevalence and Frequency in the United States”, USDA, 2024
“FMI Launches 2024 U.S. Grocery Shopper Trends Series: How Consumers Are Finding Value at the Grocery Store”, FMI, 2024
“2024 Grocery Trends: A Mid-Year Guide”, NIQ, 2024
“The Future Of Technology Integration In Convenience Store Food Service”, Forbes, 2024
“Micro-Fulfillment And The Changing Needs Of Grocery Retailers”, Forbes, 2023
