Compete for Carry-Out

Asian Chains Choose to Connect with Supermarkets Recent research has revealed an interesting phenomenon that most restaurant meals are not eaten in restaurants. According to NPD Group, a foodservice market research firm in NY, the American families still eat 77% of their meals at home, at dinner time. But they don't have time to prepare a meal. Customers are buying meals from restaurants, and there is increased consumer demand for restaurant carry-out, and ready-to-eat meal solutions. However, customers are now also looking at supermarket for pre-cooked, ready-to-reheat meals to take home, heat up and place on the dinner table. Data from the Food Marketing Institute (FMI, Washington, D.C.) indicates that supermarket retailers and restaurants share nearly half and half of the market pie – restaurants and supermarkets are competing for the dollars spent on food away from home – a $950 billion market. At dinnertime, people are hunting “fuel” at both restaurants and supermarkets. There is a growing market coined as the home-meal-replacement trend. KFC is known as the originator of complete dinner take-out service; while Boston Market (now owned by McDonald’s Corp.) is savvy to sell both freshly cooked meals and ready-to-reheat packages, allowing more choices for customers. It also provides dine-in, drive-thru and takeaway options for the customer’s convenience. A step further in the competition, Boston Market rolls out its frozen dinner entrees and sells them in neighborhood supermarkets. In the ethnic cuisine segment, Chinese restaurants were among the first to provide take-out meals for U.S. families as early as in the 1960s, even before pizza deliveries. It is typical for a Chinese restaurant that 20%-30% of its revenue is derived from take-out business. The practice eventually spreads out to the majority of Asian restaurants. Now facing the dinnertime challenge from supermarkets, two Asian chains have taken lead in the home-meal-replacement trend. One being Leeann Chin’s Asian To Go, some 60-stores quick service & Chinese takeout chain, based in Minnesota. The other, HyVee Chinese Express, over 110 units of Chinese takeout counter within the established HyVee supermarkets in Iowa. Interestingly, the two Asian quick service chains took the opposite path to build up their business. While Leeann Chin’s, a household name in Minnesota, builds it fame from restaurant takeout business, and expands into retailing at supermarkets; Hy-Vee supermarkets strategically recruits Chinese chef-owners to operate a Chinese food takeout department in each of its store. No surprise to all, both chains have been enjoying great success and benefits in the connection, or partnership between restaurants and supermarkets.