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The restaurantification of retail

  • Stefan Chomka
  • 25 October 2024
  • 4 minute read
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This article was written by Restaurant Online Magazine. Click here to read the original article

Ever since Pizza Express put its salad dressings on supermarket shelves in the nineties and then made its American Hot and Sloppy Guiseppe pizzas available in the chillers in the early noughties restaurant brands have realised the potential of making their products available for people to buy as part of their weekly shop. More recent events, in particular the Coronavirus lockdowns, have made this ‘omnichannel’ approach even more important, with the years since 2021 seeing a huge uptick in restaurant brands launching into retail to drive additional revenue.

Such as which brands?​

There’s too many to mention here such is the popularity of the practice. Focusing merely on the relatively new developments there’s The Real Greeks’​​ recent move into Tesco with a 15-strong product range, Iberica Restaurant’s deli range​​, QSR Asian brand Chopstix’s new Wok Pot​​ range of sauces, Italian QSR brand Coco di Mama’s baguette retail range,​​ and Ottolenghi’s retail range within Waitrose. But think of a well-known restaurant brand and the likelihood it will have some sort of retail presence, whether it be Zizzi, Rosa’s Thai​​, Itsu, Nando’s, Franco Manca​​, Wagamama, KFC​​, Leon, Gourmet Burger Kitchen (GBK), the list goes on…

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Which retailers are driving this?​

Tesco and Sainsbury’s are the two major retailers that have really embraced restaurant brands, either putting them in their chillers and on their shelves or partnering with them for dine-in options (see below). Yet it is supermarket brand and frozen food specialist Iceland that has really taken the notion of restaurants in retail and run with it. It has made exclusive restaurant brand tie ups a core part of its product offer, and inside its freezer cabinets you’ll find branded products from Greggs, Harry Ramsden’s, Sides, TGI Fridays, Chiquito, and Ed’s Easy Diner – as well as pizza from Lewis Capaldi.

You mentioned dine-in in supermarkets?​

Yes, a number of restaurant brands have pitched up inside some of the larger supermarket spaces in a bid to entice shoppers through their doors. These include dessert brand Creams​​, which launched within Tesco Cafe’s as co-branded spaces, McDonald’s, which can be found in selected Asda stores, Nando’s, which has a restaurant in a Tesco Extra in Newcastle, YO!, which has sushi kiosks ​​in Tesco stores, Greggs in Sainsbury’s​​, and Slim Chickens in Tesco Extras. The clearest sign of how retailers and restaurants view the potential of a partnership can be seen in Boparan Group’s restaurant and takeaway brand The Restaurant Hub​ ​(pictured below). The concept combines eat-in, takeaway and home delivery across its dining brands Caffè Carluccio’s, GBK, Slim Chickens, Ed’s Easy Diner and Harry Ramsden’s and can be found in a handful of Sainsbury’s supermarkets.

Boparan-to-bring-its-The-Restaurant-Hub-concept-to-Kidderminster

Why is the partnership so popular?​

In the past supermarkets and restaurants seemed to be at loggerheads, each fighting over the same potential customers – Marks & Spencer’s famous £10 Dine In meal range was seen by many as a broadside against the eating out sector – but more recently they’ve seen the benefits in working together. For a restaurant brand, it gives them another revenue stream beyond dine-in and takeaway and hopefully drives brand recognition in the process, while for the retailer it adds a point of difference, and even a touch of prestige to its retail offer while also being another reason to attract customers. Having a food/cafe offer from a well-established restaurant can also take away the headache of a retailer having to run one itself. There’s some decent wedge to be made, too. Back in 2015, Pizza Express surpassed the £100m mark of brand retail sales for the first time and the group is understood to now sell more pizzas via its retail channels than in its restaurants. Last year Itsu said it also wanted to hit this figure, with plans to grow its grocery sales from £60m to £100m​​ by 2025, although founder Julian Metcalfe believes the brand could reach £300m in time.

Tiffin-Boxes-web
Not all retail is a success: Cinnamon Kitchen’s range was discontinued after a year

It sounds like a no-brainer for brands then…​

As with everything there are pitfalls. Retail is a results game, and the larger retailers are notoriously reticent at giving up valuable shelf space without guaranteed sales, meaning that there are inevitable casualties. One recent example is Cinnamon Kitchen’s retail range​​, which was axed by Tesco after little more than a year. There’s also the issue of quality, with the danger that restaurant brands will undermine their dine-in offer with an inferior product when aspects such as extended shelf-life, cooking, and pricing come into the equation. Itsu recently broadened its retail range, following on from its excellent frozen range of gyoza, with a chilled sushi range​​ in Tesco, but not before it dedicated ‘several years’ to the project to overcome what it says were the numerous challenges, including preventing the rice from hardening on shelf and creating an element of crunch that didn’t impart any additional flavour.

What does the future have in store?​

Very clever. It’s likely that we’ll see even more brands enter the retail sector (brands currently missing from the shelves include Pho, German Doner Kebab, Pizza Hut, Pizza Pilgrims, Turtle Bay) as well as those already with a presence looking to deepen their offer. As a pioneer of the retail range, Pizza Express for one is not resting on its laurels. At the end of last year, it moved into the freezers with a frozen retail range​​ and it is also set to trial a food-to-go type offer called Pizza Express Pod​​ at a Tesco Extra store in Southampton. Also, expect more restaurant groups to bring a retail element into their businesses. Italian restaurant groups lead the way, with Lina Stores and Pizza Pilgrims, which have a deli offer​​ at some locations, and London-based Italian restaurant group Emilia’s Crafted Pasta has just launched an ecommerce platform​​ focused on dried pasta ahead of a planned push into shops and supermarkets.

Please click here to access the full original article.

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