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Case Study: Cafés boost sales

Storewide communication necessary for in-store café success

 - Photo courtesy of Central Market
By Lisa Duchene
May 01, 2007

Every morning, the restaurant chef at the newest Central Market store near Dallas-Fort Worth chooses from about 100 fresh fish species in the store's 50-plus-foot seafood case. He looks for the day's menu specials like Baja fish tacos made with fresh tilapia, Kona Kampachi™ from Hawaii, or perhaps grilled salmon with a Moroccan charmoula dressing.

Later in the day, customers entering the café see demonstration plates of the specials, talk with chefs working nearby and read about the blackboard specials.

Customers also see something on the specials board that they normally wouldn't: "Made with fish available in our seafood 
department."

Central Market, billed as a destination store for foodies seeking freshness and convenience operated by San Antonio's H.E. Butt Grocery Co., is right on trend: About half of U.S. grocery stores in 2006 had in-store, sit-down eating areas, according to The Food Marketing Institute, up from 36 percent in 2001.

Supermarkets began adding cafés in the last decade to regain some of the business lost to the restaurant industry as time-pressed consumers replaced home-cooked meals with restaurant-cooked ones. In 2005 and 2006, consumers ate an average of 1.5 meals out per week, according to FMI.

In 2005, consumers spent $44.48 billion on seafood in restaurants and $20.47 billion at retail, figures indicating consumers are happy to reward chefs for their preparation work.

Central Market is bucking the way this café trend is usually executed. Most in-store cafés, while convenient for shoppers, aren't integrated with the store or used to their full potential as merchandising tools.

"Some stores are [integrating foodservice] but not enough," says Howard Solganik, a consultant with Culinary Resources in Dayton, Ohio, who advises retailers on their prepared foods and meat and seafood departments. "Most [departments] see themselves as either sellers of ingredients or sellers of convenience."

At best, most supermarkets neglect to link the communications, operations and marketing of their foodservice with departments like seafood, says Solganik. At worst, it's a turf battle, he says, because typically everything from labor allocation to bonuses is based on department sales. So department heads often view a wholesale order from their in-store restaurant as hurting their bottom line, says Solganik.

Not so at Central Market. The seafood department, a 65-foot display case in the café of 90 chef-prepared, take out items, and the café's menu are all integrated. The menu features about 20 percent seafood.

"I have a great relationship with my seafood manager," says Glenn Terrell, executive chef for Central Market's Southlake, Texas, store. "I order fresh fish from him every day. He's not losing out on anything."

Terrell credits H-E-B's hiring and training programs with instilling a culture of teamwork that fuels successful integration among the departments.

"If you hire talented, engaged people who want to learn and empower them to make great decisions, the majority of problems and challenges really go away," 
says Terrell.

But does this approach help the store sell fish?

"From the business side of things, it's absolutely effective," says Terrell. Eight Central Market stores have large seafood departments, with a ninth scheduled to open in 2008. Terrell's store is the fourth Central Market in Dallas and the first with a café (the two other Central Markets with a café are in Austin). The Southlake seafood department is a bit larger than at other Central Markets.

Whether a grocery store café represents a merchandising opportunity for the seafood department really depends on the retailer, 
says Solganik.

"What enlightened retailers have done is sell [the product] at wholesale, but they give the selling department a retail credit so it doesn't screw up their financials," says Solganik.

Retailers that are doing a great job at integrating cafés with their perishables departments include Ukrops in the Mid-Atlantic and Roche Bros. in Massachusetts, 
he says.

Solganik sees opportunity for supermarkets to drive seafood sales by adding cooking stations within seafood departments and designing a center-of-the-plate meat/seafood department with raw proteins displayed on one side and a complete cooking station in the center that makes the prepared foods on the other side.

On a much smaller scale, Bill Dugan, owner and operator of The Fish Guy seafood market in Chicago's Mayfair District, has learned adding an occasional restaurant operation is great for retail business.

On Thursday nights, Dugan sets up tables in front of his cleaned-out seafood cases that during the day display about two dozen seafood species. He tops the cases with fresh flowers and candles, plays dinner music and hosts a five-course dinner for 12 people, serving four seafood courses and a dessert for $100 a head.

The restaurant, called Wellfleet, started Oct. 19. Every Thursday since then, except when he closed for Thanksgiving, almost every seat has been full, says Dugan.

He started the weekly dinners because of the popularity of the shop's lunchtime lobster rolls and evening sushi classes.

Wellfleet has helped the retail business enormously, says Dugan, in large part due to local media coverage. Dugan has had a surge in retail sales, and Wellfleet has also helped his wholesale business as local chefs drop in and mention they hadn't known about the store until they saw it in the press.

"Everything on every level has been more robust," says Dugan.

The dinners also educate guests. Dugan will introduce a course and explain where the product is from, answering diners' questions while keeping the explanation short.

For large and small retailers alike, in-store dining represents an opportunity for increased sea-
food sales, as long as it is well integrated with each department and well executed.

 

Contributing Editor Lisa Duchene lives in Bellefonte, Pa.

 

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