When Grocery Stores Become Restaurants
New York’s independent grocery stores are evolving by adding dining options, providing a new solution to the needs of busy urban consumers.
In brief
Independent grocery stores in New York, such as Katagiri Japanese Grocery and Schaller & Weber, are blurring the lines between retail and dining. These stores now offer prepared meals and ready-to-eat options that rival traditional restaurants. Katagiri features offerings like onigiri, miso cod, and ramen bowls, while Schaller & Weber, a German delicatessen, attracts customers with bratwurst and fresh salads. These establishments transform the grocery shopping experience by combining convenience with restaurant-quality meals, all while maintaining the accessibility and speed of traditional grocers.
Analysis and Insights
Redefining customer touchpoints: Grocery stores are evolving into multi-use hubs where consumers can both shop and dine. This model capitalizes on convenience, creating more frequent touchpoints with customers and fostering loyalty. By offering both groceries and ready-to-eat meals, these stores become more competitive against delivery services and ghost kitchens, while retaining a physical connection with their clientele.
Space and profit optimization: These hybrid stores maximize the use of their commercial space by diversifying their offerings. Prepared foods offer higher margins, attracting both impulse buyers and those seeking quick meals. This model is particularly effective in dense urban areas where space is limited, but demand for quality, on-the-go dining is high.
A replicable model in other sectors: This convergence of retail and dining can extend to other sectors, such as department stores, food halls, or even coffee shops. Large chains and independent operators alike could leverage this hybrid model to enhance their value proposition and capture a broader range of customer needs, including cross-channel experiences.
Implications for the broader industry: This shift presents challenges for traditional restaurants, which may need to rethink their takeaway offerings or focus on creating more immersive, differentiated dining experiences to remain competitive.
Business opportunity
Conversely, restaurants are increasingly embracing retail by selling branded products, sauces, condiments, or even merchandise directly to customers. This model, seen in establishments like Eataly or Big Mamma, extends the dining experience beyond the meal and creates additional revenue streams. Offering take-home products reinforces customer loyalty, strengthens brand identity, and increases the average ticket size.
Alice P
