Ready, set, eat! Prepared meals heat up; discounters hankering for a taste - Food Merchandising

Discount Store News, July 15, 1996

The wildfire success of Boston Market has opened the eyes of other food retailers to the burgeoning home meal replacement business. Supermarkets such as Larry's Markets in Seattle and Ukrop Super Markets in Richmond, Va., were among the first to start offering meals that shoppers could pick up on a grocery trip and later heat and serve for dinner. The dishes range from roasted chickens to haute cuisine choices such as veal francaise.

Not surprisingly, discounters are poised to enter the low-margin but high-traffic business, hoping for their portion of the buy-out, eat-at-home trend. They are doing so mostly through their supercenter divisions, which already sell packaged food, but also in their traditional discount units where many chains already do an impressive business in snack foods.

Already, Wal-mart has tested - and for the time, shelved-the Chef Meals on the Go prepared meal program at its Rogers, Ark., discount store. Stopped since last fall when Wal-Mart decided to convert the unit to a supercenter-which is not slated for the prepared meals program - The Chef will be revived soon or reinecarnated into another, similar program. Kmart has yet to roll out a prepared meals program, but one is likely to appear on shelves soon since it is a major trend in food retailing today. The same is true at SuperTarget, Target's supercenter entry, which debuted a year ago. Unlike Wal-mart and Super K, SuperTarget opened its doors with a prepared meals program called Food to Go. The offerings are limited, however, SuperTarget also offers freshly made sushi meals from the fresh fish area of the store.

All three chains, like other supercenters and grocery chains, offer already-cooked meals and entree/side dishes either through in-store salad bars, delis or in-store restaurants/ snack bars.

Other discounters, including ShopKo, are reportedly looking at the feasibility of such programs to attract more shoppers into their stores.

At stake is a bigger portion of the $312.9 billion consumers spent in the foodservice industry last year, according to the National Restaurant Association.

Now that American families are busier than ever, prepared meals cooked somewhere other than home is a hot ticket.

"Consumers will become increasingly more reliant on immediate consumption options," said Tom Rubel of Management Horizons. "They will no longer shop once a week. They will eat out, take out and buy prepared more often.,

Supermarkets, of course, are leading this trend. "What supermarkets are selling," said Mike Julian, chief executive of Farm Fresh, Norfolk, Va., "is meal solutions for people who want good food they eat at home, but don't prepare themselves."

According to Sid Doolittle, partner in McMillan/Doolittle, Chicago, "You had people like Bread A Circus and Fresh Fields getting into offering prepared foods. Also, Ukrop has done a good job with Ukrop's Express in downtown Richmond where people can get dinners-for-two prepared and take it home from work."

Ukrop uses a central kitchen, experts said, because the quality can be controlled. Ukrop's program is called What's for Dinner Tonight and features in-store demonstrations as a way of encouraging sales.

Doolittle also noted the success of Eatzi's in Dallas, which he called the first retailer to truly bridge the gap between supermarkets and restaurants. The 8000-sq.-ft. store has fresh food that can be heated at home. What's different here is that the food is merchandised in a marketplace setting where fresh is the hallmark. All prepared food is marked down at 9 p.m. to clear the shelves for the next day.

Among the other supermarkets with cutting-edge prepared foods: * Roche Bros., a Boston-area supermarket, has a program called Home Cooking to Go. The products are made at Hans Kissle, a wholly owned subsidiary. Consumers can choose from service or self-service meals to mix and match. Roche also sells bagged stir fry. * Marsh, Indianapolis, with its What's for Dinner program, offers a different meal in its deli case each week. Meals are arranged on a plate to inspire customers. There is also a self-service area where the meals are packaged as value meals. * Publix, Lakeland, Fla., has created a line called Quick Takes, ranging from macaroni salads to pastas. * Pay Less Supermarkets, Anderson, Ind., has entrees and side dishes prepared from scratch in two central kitchens that supply all eight stores. The Home Style foods are packed in three sizes of heatsealed, dual-ovenable containers. They are also sold by the pound from the service deli. * Dominick's Finer Foods, Northlake, Ill., has a dine-in or takeout meal program including a pasta bar, wokery and rotisserie chicken. The chain also offers its signature Chef's Collection of individually packaged entrees. * Genuardi's, Norristown, Pa., has in the front of its stores a Corner Kitchen where hot and ready-to-eat meals are merchandised. * Schnucks in St. Louis, has a seafood department with cook-to-order service.

All of the activity in supermarkets has been watched closely by discounters even if it hasn't been duplicated. "The key issue of] time poverty driving the trend hasn't hit places like Washington, Mo.," said Doolittle, referring to the fact that many supercenters like Wal-Mart's serve less-populated areas.