Breakfast report: Capturing the eat-and-run consumer
Two years ago, the Safeway in West Vancouver’s sleepy Caulfeild Village put in a small eating area with a restaurant atmosphere and started producing freshly cooked breakfasts from its deli.
Virginia Lloyd, deli department manager, says there have been hits and misses on the menu, but a breakfast panini with eggs, ham and bacon is a big success. Items such as cooked eggs, yogurts and other “healthy solutions” have also morphed the store into a one-stop alternative to fast-food restaurants. “We know people are being health conscious and trying to eat breakfast in the morning, and we try to o ffer as many possibilities as we can,” says Lloyd.
Offering a prepared breakfast is one way grocers can take on McDonald’s and Tim Hortons, which have done a brilliant job convincing consumers to drop by for their morning meals. More than one-quarter of McDonald’s revenue, for instance, comes from breakfast. On a larger scale, breakfast has accounted for nearly 60% of the restaurant industry’s traffic growth over the past five years.
“Quick-service restaurants have been driving sales at breakfast by responding to consumer interest in convenience, taste and value,” says Linda Strachan, industry analyst at the NPD Group. On any given day, 14% of Canadians over the age of 13 buy their breakfast or a morning snack from a restaurant.
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Make It Easy and Familiar
Joel Gregoire, a food and beverage analyst with the NPD Group, says when Canadians eat breakfast at home they want ease, speed and habit. Ready-to-eat cereal is still the No. 1 food, representing one-quarter of all foods eaten in the home for breakfast. The other top four are toast, fruit, eggs and hot cereals. Gregoire says yogurt and hot cereals are experiencing sales growth. Both foods are quick and easy to prepare and are seen as being “better for you” by the consumer.
Meanwhile, breakfast foods aren’t exactly selling like hotcakes at grocery stores. Figures from the Nielsen Company for the 52 weeks ending November 20, 2010 reveal some uninspiring figures: ready-to-eat cereals show a 1% increase year over year, while eggs and bacon have grown at 2%. Juices are flat, frozen fruit beverages are down 10% and frozen products such as waffles, pancakes and french toast have also seen little to no growth.
Strachan sees a fairly easy fix for grocers: offer an in-store breakfast program. “There’s nothing more convenient for a customer than grabbing breakfast while they’re already in the store picking up groceries,” she says. “Any offering needs to start with a good coffee program as the cornerstone. Add pastries and other on-the-go items.”
Quality Foods is already way ahead of the curve. For the past dozen years, most of its Vancouver Island stores have housed competitively priced restaurants that sell full breakfast offerings and compete directly with Tim Hortons and other quick-serve places, says grocery supervisor Adam Wynans. “It’s fresh, it’s custom ordered, it’s as fast as a drive-thru and we provide a better offering and better service,” he says.
Wynans hopes that after having their most important meal of the day in the store, customers will then stay for their regular grocery shop. But breakfast isn’t a loss leader at this store. The margins are quite attractive, he says. “You can sell a breakfast at break-even as long as you sell two cups of coffee.”
James Fraser, partner at shopper marketing firm Hunter Straker, says eating brekkie out-of-home is one of the most talked-about consumer trends of the last decade. But grocers can still change consumer behaviour back to eating at home. The trick is to understand a key insight into how people shop. “The average shopper will fill their basket with multiple lunch and dinner items, yet place one or two breakfast items in the cart and consider the occasion solved,” says Fraser. Reminding people of breakfast options in a single part of the store will change that. Fraser suggests placing pancakes, cereal and bread near a chilled bunker with bacon, sausage and juice.
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Top 4 Merchandising Tips
1. Don’t limit breakfast foods to one display case. Placing portable foods like yogurts and cheeses in the ready-to-eat section or near checkout prompts impulse purchases for customers seeking healthy, convenient meal solutions. Or try cross-merchandising cereal in the dairy section by the milk or in the produce aisle next to fresh fruit.
2. Recognize breakfast as the occasion that it is and promote it through your flyer, advises James Fraser of Hunter Straker. Have a regular breakfast theme promoting sought-after foods that tap into trends like comfort and nostalgia, better-for-you and ingredient upgrades.
3. Have the deli department prepare artisan ingredients so people can spice up packaged purchases or a selection from the ready-to-eat section. At the Safeway in West Vancouver, deli department manager Virginia Lloyd puts sliced premium cheeses, individually sold cooked eggs and yogurt topped with cranberries and granola near the freshly made paninis that the store serves for breakfast.
4. People don’t use recipes for breakfast often. Provide in-store inspiration through appetizing food photography and meal solution ideas in the breakfast sections. It’ll make people forget about Tim Hortons’ latest breakfast sandwich.