retail news in context, analysis with attitude

by Kevin Coupe

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There have been a couple of fresh food-oriented stories this week that I thought were worth sharing…

The Washington Post had a piece about how there is a remarkable change taking place in many US restaurants - their menus are getting smaller.

As the Post writes, "For years, long, winding menus were the fad. The more options a restaurant offered, the less likely that diners would want to go elsewhere, the thinking went. And the thinking was widespread: Everywhere from Ruby Tuesday to the Olive Garden and McDonald's obliged, channeling their inner Cheesecake Factory with menus that spanned several continents and cuisines, challenging even the sturdiest attention spans."

But Americans seem to have gotten tired of that.

The Post goes on: "Industry-wide, the average menu size has fallen to fewer than 93 items this year in the United States, after reaching a peak of nearly 100 items per menu in 2008, according to data collected by Datassential Menu Trends. The average restaurant menu is shorter today than it has been in at least eight years … In all, the country's 500 largest restaurant chains have cut more than seven percent of food items offered this year, per estimates by food industry research firm Technomic."

Now, some of this is economic. Offer fewer options, and your costs go down. Simple math. But I also think there is something else going on here … a sense on the part of some restaurants that because of increased competition, they need to be better at what they do. They can't be good at everything. So they get focused. Which means having a stronger sense of what customers want (also known as the demand chain) so they can provide meals made from ingredients (known as the supply chain) that are not aimed at the lowest common denominator.

(It doesn't always work, of course. There are some restaurants and fast feeders that specialize in food that isn't actually food … and so it doesn't matter if they offer 20 items or 200. It still is going to taste like crap.)

The thing is, many customers "get" this - they also have a stronger sense of what they want. They are researching restaurants before they go, and then blogging about them after they've been. As important as the food chain is, the information chain may be of equal importance.

Which brings me to the other story that grabbed my attention - an Associated Press piece about how "the National Restaurant Association surveyed 1,300 professional chefs on the most desired foods, beverages and culinary themes in the industry and ranked the top 20. Locally sourced meats and seafood, locally grown produce and environmental sustainability were the top three trends the chefs identified. The same report predicted environmental sustainability and local sourcing at restaurants will still be in high demand in 10 years."

Once again, information about food becomes almost as important as the food itself.

These are the issues with which food retailers ought to concern themselves, I think, because they are not restricted to just the restaurant business. I believe that more and more, the best and most competitive food retailers to be good at what they do, to have specialties that distinguish them from other retailers, to have local sources of product that raise the bar on their offerings, and to effectively use the information chain to communicate about all these things.

By doing all these things, I think, retailers can differentiate themselves from the folks who only focus on price and promotions, and they can find for themselves a market niche that is aspirational, specific, and highly competitive.
KC's View: