Welcome to the new HMR

It’s Wednesday night and we’re at Longo’s. My husband is perched on a leather club chair, cold beer in hand, tensely watching the New Jersey Devils beat the New York Rangers.

I’m sitting nearby with the boys, ages 7 and 10, enjoying a buffet of grilled salmon, steamed vegetables and stone-oven pizza. After dinner, I’ll head over to Aisle 3 to pick up cereal for tomorrow’s breakfast.

Welcome to the new HMR, complete with big-screen TVs, local wine, free Wi-Fi and a smorgasbord of fresh meals that rival any four-star restaurant.

There’s not a dry rotisserie chicken in site, let alone a yellowing bowl of potato salad under glass, items that for years typified HMR in the eyes of many customers. Today, to sell ready-to-eat food, grocery stores are becoming restaurateurs.

In the case of this Longo’s, next to the Air Canada Centre and a slew of condos, comfortable seating and a bar called Corks makes staying put for dinner all the more appealing.

For those who want to take their food to go it’s no problem either. A range of take-out food options, from freshly carved roast beef to hot panini is always on hand.

“Longo’s is aligning itself with its customers’ needs, in this case it’s the condo dweller who is coming in several times a week for fresh food,” says designer Glen Kerr, former executive vice-president at Watt International, the agency that designed this Longo’s store.

Other grocers are finding their own niches in HMR.

At Loblaw’s show-piece store in Toronto’s old Maple Leaf Gardens, the entire front is devoted to prepared meals. Shoppers can move from the sandwich section to the grill to the dessert counter, pay and eat their food at tables provided or to go.

Meanwhile at Fortino’s newest store, in Burlington, Ont., ample comfy seats and access to Wi-Fi make dining more pleasurable.

South of the border, a similar trend is occurring. In Iowa, Hy-Vee recently opened its first restaurant with table service. It has 200 seats, sells beer and wine, with a bistro menu in the evening and cafeteria food at lunch.

New York–based Wegmans began opening stand-alone restaurants near its supermarkets two years ago that include pubs.

Grocers are beefing up HMR for good reasons. Eat-in and take-out traffic is on the rise. In Canada it’s up 16 per cent in the last five years at supermarkets, according to NPD Group.

In the last 12 months to February, traffic’s up 10 per cent alone in Ontario and eight per cent in Quebec. Shoppers are primarily opting to buy a prepared meal at lunch and a side for dinner.

Other studies have found changing HMR menus and shopper attitudes as well. A survey by California-based Technomics found 40 per cent of consumers agree that retailers’ prepared food offerings are as good as restaurant meals and with better prices, too.

And a recent report by Packaged Facts found more stores are offering market fresh foods rather than just the classic comfort foods HMR used to feature. The reason: consumers are more health-conscious.

“People don’t want processed food for lunch or dinner anymore,” Kerr says. When supermarkets have the smell of freshly prepared meals right where customers enter, “it’s like your own grocery drive-thru,” he adds.

Loblaw’s Maple Leaf Gardens is a case in point. Three steps in, customers are welcomed with a culinary feast for the senses: made-to-order pizza, sushi and rows of tantalizing cupcakes.

The front of the store is divided among various counters, each with its own look and name, just like food stalls in a market. The main counter, dubbed the Grill, has a brick and stainless steel facade with neon signage. Over to the right, the sushi counter (run through Loblaw’s T&T grocery chain) features dark wood paneling.

The Grill is worth paying attention to for more than its sleek style. It’s pure restaurant from an operations standpoint, serving three distinct meals a day. Shoppers can get eggs and bacon for breakfast in the morning, then the counter closes for cleanup and prep, before opening again for lunch.

Al Burke, who oversaw the building of the store as Loblaw’s senior vice-president of construction, says set meal times create a restaurant environment. It also solved the biggest complaint many customers had of supermarket HMR–that in slow periods food sat for too long and appeared unappetizing.

“You can’t cook the stuffed pork tenderloin in the morning, have it sit on the steam table all day and expect it to be of any quality at 5 p.m.,” says Geoff Wilson, who analyzes the food industry as president of FS Strategy.

To do well in HMR, grocers should take their cue from the restaurant sector because that’s what consumers are used to. That means fresh preparation and production schedules that produce meals as close to demand as possible.

Stores can also pair prepared foods with in-store events and feature detailed menu boards with the specials of the week to help customers choose. And, of course, offer variety. “If you keep putting the same food out day after day, there’s no reason to come back,” Wilson says.

Like restaurants, grocers are also using websites to drive traffic to their HMR. Ottawa’s Farm Boy features an online menu of its prepared items complete with heating instructions. Wegmans has a build-it-yourself $6 meal feature on its site that calculates calories and cups of vegetables for each entree.

In Wisconsin, Festival Foods puts up a detailed monthly calendar of prepared foods. Customers can see what’s on the hot-bar buffet before they walk in the door.

“They check it regularly and we’ve had a few folks write in if we deviate from the menu,” says deli director Lars Batzel. The online menu has caught on with people at work, Batzel says, because they are able to go online to decide what they are going to have for lunch.

It’s not only the big grocers who are finding glory with HMR. Evan MacDonald, owner of the Village Grocer in Markham, Ont., dedicates one-third of his 10,000-square-foot store to HMR with a crew of 75 staff to prepare it.

The investment has been substantial, but the results are well worth it, MacDonald says. In addition to the fresh and frozen foods sold at his store, MacDonald has more than 30 other retailers who carry his products.

One happy result of HMR, he says, is less food waste. “We’ve never had a ‘reduce’ section because any apple with a dent or scratch in it ends up in our apple pie.”

At another independent, Pete’s Frootique in Halifax, a lunch program has proven so popular, lineups often form.

The “Action Station,” as it’s called, features a different made-to-order fresh meal every day. A sandwich bar with hot carved roast beef, ham, chicken or lamb gives customers the chance to build their own gourmet double-decker, with an assortment of toppings.

HMR is helping independents differentiate themselves from the competition, says John Scott, president of the Canadian Federation of Independent Grocers. And with the ethnic population in Canada soaring, so are opportunities for HMR.

“Retailers will say they are in a large pocket of Indian or Asian customers and they find ways to provide home-cooking quality meals that appeal to them,” says Scott.

Indeed, Asian supermarkets are masters of HMR. T&T and Sunny Supermarket, feature extensive HMR sections because Chinese and South Asian consumers are used to eating at the grocery store.

One especially compelling HMR concept is found at Korean grocer Galleria in Toronto’s Don Mills neighbourhood. Here, there are seats around a rectangle-shaped counter where diners can eat and watch giant flat-screen TVs above.

Ultimately, good HMR is about keeping consumers top of mind and offering innovations that really speak to them, says Joel Gregoire, industry analyst at NPD.

He suggests doing as much customer research as possible and getting ideas from suppliers. They’ll be keen to give suggestions if it means selling more of their food through HMR.

“If you offer the right environment and the right service, I really think the HMR retailer can compete with the food-service operator,” he says.