Much food for thought in store

The market for in-store catering is extremely diverse, largely because of the range of stores that have catering facilities. The majority of outlets are found within grocery multiples and high street department stores. More recently in-store catering has expanded into bookshops, furnishing outlets and DIY stores.

At one end of the in-store catering market there are supermarkets, like Asda, and at the other there are luxury formats such as Harrods. Because of an increasingly competitive retail market, some department stores have moved away from the types of self-service outlet traditionally found in the grocery multiples. Some have even introduced leading brands like Yo! Sushi, alongside premium-priced outlets such as oyster and seafood bars.

According to Mintel, the size of the in-store catering market has grown 28 per cent since 1997, to reach a value of £1.44bn in 2001 – an increase that almost mirrors the growth of the eating-out market overall. A breakdown shows that department stores have the largest share of sales, despite them having fewer restaurants. The reason for this is that their size and premium proposition makes them higher revenue-generating.

Catering sales in the grocery store market have grown because of the increasing number of outlets, rather than because restaurant prices have increased. The highest value growth (17 per cent between 2000 and 2002) is in the variety store sector – outlets that sell a range of products from groceries to clothing. This is in part because of the expansion of the Marks & Spencer’s Café Revive outlets.

The market for the majority of catering services in grocery multiples is food shoppers. In the department store sector, however, there has been a trend towards creating destination cafés and restaurants. Selfridges has taken this even further by opening two standalone outlets.

The fact that 14 per cent of consumers think that in-store catering outlets are a good meeting place bodes well for the creation of eating places that act as a”destination location” for shoppers.

In terms of attitudes towards in-store catering, Mintel’s research shows that the most important factor is convenience, with more than half of adults agreeing. More than a third of consumers think that in-store catering is good value for money. However, there has been a decline of four percentage points since 2000. This reflects the move away from canteen-style environments to more stylised cafés and restaurants, some of which are more expensive. This is also a factor in the five percentage point decline in the number of consumers who think that in-store restaurants catered well for children.

Perhaps the most significant change in attitude is the decrease in the number of consumers that prefer eating in pubs or burger bars (from 23 per cent in 2000 to 13 per cent in 2002) or in a waitress service restaurant (from 19 per cent to ten per cent over the same period).

Given current lifestyle changes, informal eating is now more likely to be in a café, snack bar or take-away than in a restaurant. This is because consumers now have more options to choose from when eating out. Only four per cent think that in-store food is of poor quality, indicating that this is unlikely to be a barrier to use.

Of consumers who have a positive attitude towards in-store catering, women in particular consider in-store outlets to be convenient. They also think that they are good meeting places and a good place to go for lunch.

However, they are less likely than men to think they are good value for money, which suggests that their use of in-store facilities relates more to their location and menu than to exceptional value.

Attitudes also vary according to age. For instance, 15to 19-year-olds and 35to 44-year-olds are least likely to find in-store catering convenient. The latter age group tends to use the facilities less and the lower level of convenience could be a factor. Despite not rating them so highly for convenience, 15to 19-year-olds are the ones most likely to think that in-store catering venues are good meeting places, which is a key factor behind this age group using them.

Mintel believes that in-store catering will continue to benefit from the general increase in consumers eating out, particularly those who do so for convenience. However, retailers will face strong competition from high street catering outlets, which will to a certain extent hamper growth. This means that in-store caterers need to improve their offering, not only in terms of the quality of food, but also the ambience and décor, in an effort to attract both shoppers and non-shoppers alike.