Ad Banner
Advertisement by Open Privilege

Can food-to-go drive growth in grocery retail?

Image Credits: UnsplashImage Credits: Unsplash
  • The food-to-go market is projected to reach £23.4 billion by 2027, driven by the resurgence of office routines and evolving consumer preferences.
  • U.K. retailers are innovating their food-to-go offerings to compete with restaurants and specialized food service operators.
  • Pricing, promotions, and digital advertising are critical strategies for capturing the growing demand for food-to-go.

The food-to-go segment has undergone significant changes in recent years, influenced by the pandemic, high inflation, and shifting consumer preferences. As professionals return to their office routines, the demand for convenient, on-the-go meals is resurging, presenting a strategic growth opportunity for grocery retailers. According to the Institute of Grocery Distribution, the U.K. food-to-go market is projected to reach £23.4 billion by 2027, marking a 26% increase from its pre-Covid value. This article delves into how food-to-go can unlock growth in grocery retail, supported by insights from industry experts and recent market trends.

The pandemic significantly impacted the food-to-go segment, with a decline in demand for office lunches and on-the-go meals. However, as professionals resume their office routines, the food-to-go market is witnessing a renaissance. Alex Freudmann, managing director of food at Marks & Spencer, anticipates "major growth in this category as people return to the workplace." This resurgence is driven by the convenience and variety that food-to-go options offer, catering to the busy lifestyles of modern consumers.

Innovation in Food-To-Go Offerings

U.K. retailers have demonstrated remarkable innovation in their food-to-go offerings to compete with restaurants and specialized food service operators. Tesco, for instance, introduced over 155 new food-to-go products in 2023, identifying the segment as a "real growth area" for the grocery chain. Sainsbury's also launched a new food-to-go range, including wraps, salads, and sandwiches, and intensified its in-store collaboration with Greggs, the bakery chain that overtook McDonald's as Britain's top choice for takeaway breakfast last year.

Asda has strategically positioned the food-to-go segment as the cornerstone of its turnaround strategy. The retailer unveiled its pioneering Food Hub concept, designed to attract customers with a diverse array of takeaway food options and hot beverages. Additionally, Asda's ambitious rollout of convenience stores, with up to 470 stores converting to the Asda Express format in 2024, highlights the growing importance of food-to-go in its business model.

Pricing and Promotions

Pricing remains a critical issue for the food-to-go segment, especially in the current high inflation environment. While many retailers have increased prices over the past two years, they are now observing declining volumes. To address this, food service operators like Pret A Manger are reducing prices for some of their best-selling sandwiches, and retailers are introducing tiered meal deals. Waitrose, for example, revamped its food-to-go offerings and introduced a £5 lunchtime meal deal, which tripled sandwich sales, according to Waitrose Executive Director James Bailey.

Digital Advertising and Social Media

In times of economic uncertainty, investing in advertising and promotions is essential. Grocery marketers have learned that consumers predominantly look to social media for meal inspiration and the best deals. The food hashtag has become one of the most popular topics on social media, prompting brands and retailers to invest in digital advertising, social media content, and collaborations with food influencers.

Deliveroo's memorable Easter campaign, featuring limited edition Game of Thrones-inspired Dragon Eggs, generated significant buzz online. Similarly, Burger King's #WhopperDance challenge on TikTok, which enlisted renowned TikTok influencers, showcased the power of social media in driving consumer engagement and sales.

Challenges and Opportunities

Despite the growth potential, the food-to-go segment faces several challenges. Increased consumption of food-to-go is eating into spending on household food, creating challenges for retailers and suppliers. Research by Shoppercentric shows that Millennials and Gen Z consumers are at the heart of this trend, with many spending less on groceries for home as they rely more on food-to-go options.

However, the food-to-go category's embrace of healthier options and sustainability presents an opportunity for grocery retailers. By offering a wider choice, easy accessibility, and pricing to cater to all tastes and budgets, retailers can attract more customers and increase their market share.

The food-to-go segment holds significant potential to unlock growth in grocery retail. As professionals return to their office routines and consumer preferences evolve, grocery retailers must innovate and adapt their food-to-go offerings to capture this demand. By focusing on pricing, promotions, digital advertising, and sustainability, retailers can position themselves for success in this dynamic market.

Ad Banner
Advertisement by Open Privilege
Retail United States
Image Credits: Unsplash
RetailJune 14, 2024 at 4:00:00 PM

How Skims CEO Kim Kardashian overcame problems in retail to achieve success

In the ever-evolving landscape of retail, where many brands struggle to keep their doors open, Skims has emerged as a beacon of innovation...

Retail United States
Image Credits: Unsplash
RetailJune 13, 2024 at 8:30:00 AM

How Shein leverages emerging cross-border eCommerce platforms

Shein, a name synonymous with fast fashion, has revolutionized the eCommerce landscape by capitalizing on emerging cross-border platforms. Founded in 2008 and headquartered...

Retail United States
Image Credits: Unsplash
RetailJune 13, 2024 at 1:00:00 AM

Why Zyn nicotine pouches are hard to find in America

The American market has seen a dramatic shift in nicotine consumption, with Zyn nicotine pouches emerging as a popular alternative to traditional tobacco...

Retail United States
Image Credits: Unsplash
RetailJune 13, 2024 at 12:30:00 AM

How Target’s supply-chain chief leveraged stores to revolutionize online fulfillment

Target has emerged as a leader by ingeniously transforming its brick-and-mortar stores into powerful fulfillment hubs. This strategic pivot, driven by Target's supply-chain...

Retail United States
Image Credits: Unsplash
RetailJune 12, 2024 at 3:30:00 AM

Johnson & Johnson's $6.48 billion talcum powder settlement: Consent judgments filed

Johnson & Johnson (J&J) has been at the center of a legal storm for years, facing tens of thousands of lawsuits over its...

Retail Europe
Image Credits: Unsplash
RetailJune 11, 2024 at 9:00:00 AM

LVMH's Dior unit under judicial control in Italy amid labor exploitation scandal

A Milan court has placed an Italian subsidiary of LVMH, which manufactures Dior-branded handbags, under judicial administration. This decision follows a thorough investigation...

Dining Singapore
Image Credits: Unsplash
DiningJune 5, 2024 at 2:00:00 PM

Additional tickets available for Chick-fil-A pop-up event on June 6

The excitement surrounding Chick-fil-A's first-ever pop-up event in Asia has reached fever pitch in Singapore. The American fast-food giant, renowned for its Original...

Retail Europe
Image Credits: Unsplash
RetailJune 4, 2024 at 1:00:00 PM

U.K. retail sales show modest recovery in May

The retail sector in the United Kingdom experienced a modest rebound in May, as reported by the latest BRC-KPMG sales monitor. This slight...

Retail Malaysia
Image Credits: Unsplash
RetailJune 3, 2024 at 8:30:00 AM

Challenges in the retail sector forecast would put pressure on Padini

Padini Holdings Bhd, a prominent player in Malaysia's retail sector, is bracing for a challenging period ahead. The company, known for its diverse...

Retail Singapore
Image Credits: Unsplash
RetailMay 31, 2024 at 11:30:00 AM

Chick-fil-A's first Asian pop-up event to debut in Singapore this June

Singaporeans are in for a treat this June as the renowned American fast food chain, Chick-fil-A, makes its first foray into the Asian...

Retail United States
Image Credits: Unsplash
RetailMay 31, 2024 at 10:00:00 AM

The QR backlash has won, and restaurants are ditching them for good

In the early days of the COVID-19 pandemic, QR code menus emerged as a seemingly perfect solution for restaurants. They offered a contactless...

Ad Banner
Advertisement by Open Privilege
Load More
Ad Banner
Advertisement by Open Privilege