When Hy-Vee opened its largest supermarket to date this past summer in Gretna, Nebraska, customers were greeted by a large food hall in addition to numerous aisles of groceries.
At the food hall, customers can find an expanded breakfast menu, a pub with 32 taps and several fast-casual offerings including Mia Italian, HyChi and Hibachi, Nori Sushi, Market Grille Express, Long Island Deli and a Wahlburgers. The 135,000-square-foot store offers indoor seating situated near the food hall, while the pub has sit-down options along with an outdoor patio.
Hy-Vee’s food hall is an example of just one of the ways that grocers are getting creative as they look to snap up more of consumers’ meal dollars. As the gap between grocery and restaurant prices widens, grocers see an opportunity to lure cost-conscious consumers to their stores by touting their made-to-order options.
Some grocers have long brought restaurants and bars to their customers with their own in-store brands, such as Wegmans’ cafes, restaurants and burger bars; H-E-B’s True Texas BBQ in-store restaurant chain; and Southern California chain Gelson’s wine bars.
Now, more grocers are turning up the heat on their culinary experiences — with some even crafting their stores around meals.
Crafting a proprietary culinary experience
Chicagoland grocer Dom’s Kitchen & Market is one such company. Focused on creating an experience centered around meals while also broadcasting a message of affordability, Dom’s is looking to blend restaurants with food retail at a time when costs are in favor of grocers.
At Dom’s, The Kitchen — the name the company uses to refer to its array of foodservice and culinary offerings — is the “heartbeat” of its stores, said Dom’s CEO Don Fitzgerald. There, customers can find proprietary restaurant brands, like The Stackup sandwich and burger shop, Gohan sushi and poke bowls, and L’Osteria Italian dishes.
Dom’s also offers grab-and-go items like sandwiches, salads and other premade meals under its store brand.
While Dom’s positions itself as an upscale meal solutions option, affordability still matters across income demographics — as evidenced by Walmart’s ability to continually nab higher-income shoppers looking to save money in recent months amid high food prices.
“If you compare it to restaurants and the costs now — inflation, service charges, tipping, delivery charges — we offer a really high-quality product that’s affordable for a lot of folks,” Fitzgerald said.
While consumers may continue to choose restaurants for certain occasions, Dom’s is emulating restaurants to be on par.
“Restaurants do really well in terms of hospitality and customer service and the delivery of food,” Fitzgerald said.
To complement the meal options, Dom’s is focused on creating an ambiance where consumers want to stay and hang out, with “comfortable” and “approachable” seating and lounge areas to have a meeting, play chess, host a book club or bring a date, Fitzgerald said.
Similarly, The Fresh Market’s newly opened store in Port St. Lucie, Florida, features a center store culinary kitchen called The Square offering items from recipes developed by the specialty grocer.
At that store, customers can get customizable brown rice bowls, salads, sandwiches and chicken tortilla soup with lime crema from a made-to-order station. They can choose from fresh hot foods, including smoked salmon, BBQ sold by the pound or as a platter and rotating seasonal hot sides.
Cooking up partnerships
For some grocers, beefing up their foodservice offerings involves collaboration. Ahold Delhaize’s Giant Food banner, for example, recently rolled out three different in-store offerings featuring well-known local restaurants.
In March, Giant Food opened its first in-store fast-casual restaurant in partnership with Maryland-based chain Nalley Fresh at its Ellicott City, Maryland, store. The in-store restaurant serves up customizable salads, wraps and bowls that Giant Food markets as “healthy and fresh meal options to further elevate the in-store shopping experience.”
At a store in Elkridge, Maryland, the banner this summer debuted a Ledo Pizza Corner Shoppe with take-and-bake and “order hot from the oven” pizza options, building on the grocer’s existing partnership with the Annapolis, Maryland-based pizza restaurant chain that has included selling jarred versions of Ledo’s sauces.
Ledo pizza now is available at “select” Giant Food stores with plans to bring the Ledo Pizza Corner Shops to more locations, especially as remodeled ones, Giant Food Director of Deli & Bakery Cindy Volk said in an email.
“We have been doing a rolling launch of this program to ensure that we are maintaining the highest standards and quality of product. … We are excited to continue to grow this program as our launch has been very successful,” Volk said.
Also this summer, Giant Food teamed up with Ben's Chili Bowl to sell half smokes, chili and chili sauce from the famous Washington, D.C., restaurant in the prepared food sections and hot bars at stores throughout Washington, D.C., Maryland, Virginia and Delaware.
“We have seen an overwhelming positive response to the launch of Ben’s Chili Bowl in our stores. … Our customers love that they can now get the same delicious secret family recipes [from Ben’s Chili Bowl] at their local Giant,” Volk said.
Giant Food is “very intentional on who and how we partner,” Volk said, noting that it took the grocery chain a few years to develop its partnership with Ben’s Chili Bowl.
Other grocers are also taking the partnership approach. At its store in Chicago’s Old Town neighborhood, for example, Dom’s customers can find Roman-style pizza from Bonci, an Italy-based pizzeria that has an exclusive partnership with the company.
For Giant, its in-store restaurant offerings are less about competing with restaurants and more about improving access to established offerings that its customers already crave — while also getting a slice of the sales.
“Our customers are constantly looking for quick, delicious, affordable meal solutions and these unique partnerships allow our customers to have easier access to their favorite local restaurants and brands,” Volk said.
