Home-meal battle heats up: restaurants, grocery chains seek gains as Boston Market falters

Nation's Restaurant News, Dec 15, 1997 by Richard L. Papiernik

While Boston Chicken Inc. tries to scratch out a financial survival plan for its dwindling 1,200-unit Boston Market chain, several supermarket and restaurant operators are expanding own versions of home-meal replacement.

Moreover, they are jumping on the marketing and development bandwagon to boast that they no longer are taking a backseat to larger rivals in bringing convenience meals to the public.

Despite a string of losses, Los Angeles-based restaurant operator Koo Koo Roo Inc. has begun an expansion program outside of its core California market into Nevada, Florida and the Washington Beltway. Piccadilly Cafeterias, based in Baton Rouge, La., has launched Piccadilly Express in conjunction with Baton Rouge, La.-based Associated Grocers.

Emily's plans to add two more restaurants early next year near its home-base unit in the Phoenix area. And upstart Red River Barbeque & Grille has announced plans to expand its home-meal-replacement program.

Meanwhile, a growing trend by food retailers to market nearly prepared and fully prepared meals has emerged. That movement follows several years in which the retailers have watched restaurants take a bigger share of the $640 billion-a-year food market, which now is almost evenly split between foodservice operators grocers.

The Schenectady, N.Y.-based Price Chopper supermarket chain has launched a direct marketing attack against the Boston Market, Pizza Hut and KFC chains with an initial $1 million promotional campaign that introduces its "Ready Meals" program.

The campaign has used billboards, newspapers, drive-time radio, flyers, store signage and employee buttons to deliver such messages as: "Why go to Boston for chicken?" and "Why go to Kentucky for chicken?" and "Why eat in a hut?"

"We do a drive-time radio and a four-page weekly supplement themed around a complete meal at Price Chopper," says Joanne Gage, a spokeswoman for the supermarket chain. "We promote our ready recipes and have ready registers dedicated specifically to our ready-meals customers."

The menus include typical comfort food items but range through various ethnic foods, such as Italian, Chinese and Cajun. In the smaller markets, with a more limited menu, Price Chopper designates one register every day between 4 p.m. and 7 p.m. for foodservice takeout.

The chain also began an Internet site with a Ready Meals location that provides information on the program and food features.

"What we've also found out from our customers is that when they talked about convenience of takeout, that also meant they wanted no clean-up, no dishes to do. So the means are packaged with clear windows in microwavable containers," Gage says.

She declined to disclose information on the profitability of the Ready Meals program but said it has gone beyond expectations, "and we have watched the whole thing improve and keep growing."

The chain's competitive position also got a boost, Gage says, when staff members from a regional upstate New York newspaper, the Albany Times-Union, did blind taste-tests at various takeout chicken venues and voted Price Chopper's fare as the best tasting.

While few concepts in the market for home meal replacement, or HMR, can be pointed to as money makers -- especially after the revelation that Boston Chicken probably would lose $100 million this year -- the HMR game has turned into one of scrambling for future position in the share-of-stomach marketplace. Indeed, though future profits are a prime consideration, many observers point to development of HMR as a necessity for survival.

"Supermarkets have to get into the meal business even if they don't make money with it," Glen Terbeek, partner at Andersen Consulting in New York, said at a recent food industry gathering in Philadelphia. "They've got to get into it to keep the consumer coming into the store."

The so-called meal solutions being offered by rival operators are more than just solutions for busy consumers, according to food-industry insiders, who see packaged dishes as potential solutions for supermarket that need to remain competitive in the HMR marketplace.

Manufacturer Mike Domingos of River Ranch Fresh Foods in Dallas, addressing a group of industry executives at a Marketing Institute conference in Dallas, recently said, "We are all going to be seeing some losing periods while we are trying to figure out the way to go."

He urged supermarket operators to assemble products in a way that makes sense to the shopper, because "the consumer demands the convenience, and you can no longer send her all over the store."

In Texas the 52-store Randall's Food Markets of Houston and its 52-store Tom Thumb markets recently introduced a new meal solutions concept they have branded "The Busy Chef." The program is expected to help meet the competition from Dallas-based Brinker International's Eatzi's market/takeout concept, whose Dallas unit has annual sales of about $12 million, nearly 80 percent of that from prepared meals. Eatzi's new unit in Houston has projected annual sales at somewhere between $10 million at $18 million.