Mike von Massow
Bridging the retail and restaurant divide
Updated: Aug 12, 2019
Canadians are spending a larger and larger proportion of their food dollar in restaurants. We’ve also seen a blurring of the line between traditional grocery retail and restaurants with delivery services and ready to cook meal kits either offered in store, or else delivered to consumers’ homes.
It is interesting to watch different companies carve out new areas in the food landscape. These kinds of initiatives are all part of an effort to serve the diverse wants of an increasingly fragmented consumer market. I had the good fortune of getting a sneak peak of a new concept in the Guelph market straddling the restaurant/retail divide.
Park Grocery Bar and Deli is the newest property opened by the Neighbourhood Group of Companies, a local group of restaurants. It is a smallish, read intimate (30 seat), restaurant with dreams of providing local residents with the option to pick up ready to eat meals to take home or to the nearby Exhibition Park.
Even the name, based on the original business located in the building, reflects the hybrid role Park Grocery will play.
As you enter the building you walk up to a counter to place your order - even if you plan to eat in the restaurant. You can order on the spot or else over the phone in advance to accelerate your order. There are also coolers and shelves for a select number of “grocery” items like milk and assorted beverages. If you sit down in the restaurant, the food will be delivered to your table. Otherwise, you will pick it up at the counter. They have even included an old-fashioned milkshake machine for those summer days in the park.
The “fast casual” model of restaurants, where you order at the counter and either take food to your table or else have it brought to your table, is an emerging concept. It is much more popular in the United States than in Canada, but we see some examples here too.
Park Grocery is a bit different in that the dine-in experience is complemented by take-out. In fact, my guess is that they are expecting at least as much take-out business as dine-in. One argument for fast casual is that it requires fewer staff, which should keep prices lower in a competitive environment. Another element that is important for Park Grocery is the hope that they can build a single team without the traditional split between front of house (the servers) and the back of house (the kitchen). Although employees will have specific appointed roles, there will be overlap. Food will generally be run by front of house staff but could be delivered from the open kitchen if the service counter is swamped. Dishwashing will also be a shared role.
The idea is to build a single strong team which is something many restaurants have historically struggled with.
I’m very much intrigued by their “Neighbourhood Club” program. Some restaurants have loyalty programs but this one is different. Customers can accumulate points (based on 5% of purchases) for future purchases. This makes sense for a business grounded in a neighbourhood. It also makes sense from a revenue management perspective, in that it rewards regular customers and encourages repeat business. This program is especially unique in that it takes an additional 5% and allocates it to local projects focused on improving the community. It provides customers with not only an economic incentive, but a community building incentive to visit.
This is doing restaurants differently.
It is also worth noting that the parent company, The Neighbourhood Group of Companies, is a certified B Corporation. This means that they are required to meet established standards of social and environmental performance. In addition to their community work and donations we discussed above, they pay a living wage - and everyone front or back of house starts at the same living wage. Fast casual generally doesn’t get tipped - at least to the same level as classic dining service. They also provide benefits, an initiative virtually unheard of in the restaurant business. The restaurant will be carbon neutral through the purchase of carbon offsets.
While Park Grocery is not currently B-Corp certified, it will be run under the same values and actions as the other restaurants and is expected to be certified in the next round of recertification.
It will be exciting to see the future for Park Grocery as they are innovating in the evolution of food service.
Recommended citation format: von Massow, M. “Bridging the retail and restaurant divide”. Food Focus Guelph (11), Department of Food, Agricultural and Resource Economics, University of Guelph, January 29th, 2019.
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