The multiples are taking a big slice of the foodservice pie. We must fight back, writes Steve Dixon
It’s interesting reading trade press and financial articles about what’s happening with the multiples. The two ends of the retailer scale – namely Aldi and Lidl at one end and Waitrose at the other – are the only ones showing real and sustainable business growth.
In the middle are the ‘mainstream’ or ‘mass appeal’ retailers, such as Tesco, Co-operative, M&S and Morrisons, to name but a few, all trying their best to be all things to all people.
They are retailing food in whatever format they can, which leads you to wonder who is making the most impact and where these middle-of-the-road retailers will go next to increase volume share and secure sales growth.
The direction they choose could pose a threat to the foodservice market, which is as an island on its own at the moment. It certainly seems that everyone is prepared to invest to get a share, with the likes of Tesco buying into coffee shop and restaurant chains, and M&S quite nicely tucking away foodservice-type destinations in its bigger units (for instance, its restaurant at Meadowhall in Sheffield and ‘Food to go’ at service stations).
So you might feel compelled to ask whether this is a threat to the joy of being stranded on the foodservice island – a place where people still count, and people sell food and service to real people (not spreadsheet retailing wizards).
I certainly believe mainstream foodservice must keep an eye on all these professional retailers as they scramble for volume and value growth to satisfy and appease shareholders and investors.
But foodservice retailing is ‘food and service’, so foodservice must keep hold of its nerve and keep doing what it ‘says on the tin’.
So what’s the impact likely to be on the more than 300,000 foodservice units, ranging from quick-service restaurants to high-end dining, that make up the diverse and lucrative foodservice market?
Online shopping services from foodservice operators – particularly the multiples’ home delivery/click-and-collect services – now mean that while these operators compete head on with the emerging ‘in-store’ retailer foodservice channels, they are also seeing their potential consumers go to the multiples and spend disposable income on takeaways, breakfasts or whatever dining occasions they choose.
So I would ask a question of all foodservice operators who metaphorically sit down for a sandwich in the M&S café or for coffee and cake at the Tesco canteen: why give these retailers your business when they are essentially your competitors, who could be stealing your regular customers?
Surely, they put at risk the delivered foodservice operators, which can provide a better range and product offering by buying supplies from the retailers as well?
I must confess it frustrates the life out of any wholesaler that any foodservice operator should actively want to shop online at a multiple or take time out to go to the multiple for supplies, when a wholesaler can provide at least as good a service and product range as any supermarket can offer.
There may be good promotions at the multiples but tell me a wholesaler who doesn’t offer everyday low prices on key lines or supplier-sponsored promotional activity.
With this in mind, it’s important to remember times change and the world will not stand still. Foodservice is, after all, retailing food with a good standard of service. Offering a unique selling point over your local competitor – whether it be a multiple or an independent – will usually mean you win regular business.
Just a slight twist over what your neighbouring cafe, takeaway or bar is offering will usually be the difference between how many customers return or even give a recommendation to eat there.
Whether it be a multiple or another independent that is your customers’ competitor, the old Abba song sums it up well: The Winner Takes It All.
Steve Dixon is the channel director of Cognosco Marketing, which works with foodservice wholesalers and suppliers. He presented at the Country Range Group conference last year.
Steve has been working for Cognosco Marketing for the past two years and says that foodservice is his “spiritual home”. He started working life as a part-time shelf filler in a supermarket 40 years ago. After 10 years in retail, he went across to ‘the darker side’ as a sales rep. In 2004, he worked for Nisa Retail as a buyer and then in 2008, he moved to Today’s Group as foodservice controller, before joining Cognosco in 2011, where he has worked since.
