Restaurant-focused retailers continue to innovate and expand

Dive Brief:

Hy-Vee has announced plans to open a Wahlburgers restaurant in Brookfield, Wis. — its fourth overall and the first in the state. The location is set to open early this summer at The Corners of Brookfield shopping center. The new restaurant will serve signature burgers, homestyle dishes, fish, chicken and vegetarian option as well as a full bar.
The new restaurant is part of Hy-Vee’s plan to build, own and operate a total of 26 Wahlburgers restaurants. In addition, the West Des Moines, Iowa-based grocer operates more than 100 Market Grille restaurants adjacent to its stores, and has incorporated select Wahlburgers menu items into those locations.
San Antonio-based H-E-B recently opened its twelfth restaurant concept, True Texas Boil House, in Houston. The seafood restaurant will serve grab-and-go baskets and shrimp, crawfish and crab legs, boiled and sold by the pound. It also offers Cajun fries, hush puppies, coleslaw, seasoned corn and potatoes and fried catfish and shrimp.

Dive Insight:

Grocers like H-E-B, Hy-Vee and Winn Dixie are building in-store restaurants as consumers shift more of their spending to meals consumed away from home. At the same time, retailers see an opportunity to offer a well-rounded in-store experience to attract customers and keep them around.

By offering foodservice in their stores, grocers are pulling customers from restaurants to become the ultimate food destination. According to Nielsen, consumers are eating out more than ever before and not just at traditional restaurants. Consumers, specifically millennials, are looking for something new and unique whether it’s at a fast casual restaurant, a food truck or fine dining.

The most food-forward retailers are doubling down on their offerings. Before its Wahlburgers franchise deal surfaced, Hy-Vee’s expansion of its Market Grille and Market Grille Express was well under way. H-E-B now has 12 restaurant concepts covering everything from seafood to South Flo Pizza at 10 locations, Stacker sandwiches at 11 locations and Flaming Bird Rotisserie at 39 locations.

In Hy-Vee’s case, it is targeting loyal Wahlburgers customers and those who are looking for fresh options with their Market Grille locations. To further develop that relationship and reach even more diners, Hy-Vee is building Market Grille Express for those looking for a quick grab-and-go meal.

Winn-Dixie, meanwhile, has opened a tap room that serves wings, pizza and ribs inside a Neptune Beach, Florida store. The bar offers $2 pints from local beers as well.

Grocery retailers are taking every initiative possible to increase margins and stand up against grocery behemoths Walmart, Kroger and Costco. Restaurants can be tricky for grocers to build and operate, but they serve as a differentiating feature in crowded markets where other grocers are updating their stores, as well. To really boost sales and draw shoppers, retailers need to hire experts in the restaurant industry to run their locations. They also need to understand they're not just competing with other grocery stores but with all the Chili's, Chipotles and Paneras out there, as well.