Dive Brief:

• Texas grocery chain H-E-B is opening a new in-store restaurant called True Texas Tacos, which will be available in nine locations throughout the Lone Star State, according to Eater Austin. 
• The restaurant's menu includes 12 tacos, with protein options including barbacoa, carne guisada, beef and chicken fajita, as well as breakfast taco options. Tacos will be available for under $3 until 2 p.m.
• True Texas Tacos joins H-E-B's stable of in-store restaurants, including South Flo Pizza (10 locations), Stackers sandwiches (11 locations) and Flaming Bird Rotisserie (39 locations), 

Dive Insight:

In Texas, tacos are a dietary staple and an appropriate choice for breakfast, lunch, and dinner. It seems savvy, then, for beloved Texas grocer H-E-B to flex its restaurant muscles and bring the iconic cuisine into its stable of in-store food chains. 

With more than half (54%) of millennials saying they eat out at least three times a week, this coveted demographic and other shoppers are searching for convenient, healthful ways to fill up fast. According to a recent report by the U.S. Department of Agriculture’s Economic Research Service, millennials spend a higher percentage of their food budgets — around 6% — eating away from home compared to other generations.

In response, grocers like H-E-B, Hy-Vee, Whole Foods, Meijer and Wegmans are beginning to maximize on this growth opportunity by offering restaurants within or near their stores, enticing shoppers with upscale menus and craft beer. This seems to be a winning strategy for grocers, especially as they face a declining clientele of shoppers who purchase food to cook at home.

To continue to stay relevant as interest in cooking wanes, grocers have to connect with shoppers through their prepared food selections — a growing trend in food retail and an effective way to differentiate from competitors. In 2017, Technomic predicted a 6.5% growth in the supermarket foodservice category to answer consumer demands.

In H-E-B’s case, tacos are a win as they not only fit the bill for convenience, but also cater both to those who regularly eat a diet of traditional Mexican cuisine and the millennials who are constantly on the lookout for innovative, regional, and ethnic fare. Plus, at $2 to $3 per tacos, the price should catch their eye.

If H-E-B can continue to refine its in-store prepared food selection while not losing focus on its core business, the company should be in good shape in this competitive environment, where the lines between restaurant and grocery are becoming increasingly blurred.