McDonald’s has a new competitor — and it isn’t Chipotle.
The grocery-store chain Kroger is ramping up its prepared-food offerings and luring fast-food customers, according to Jonathan Maze at Nation’s Restaurant News.
The industry consulting firm Technomic polled customers on what they would eat if they didn’t “get a bucket of chicken or a salad bar from the grocer,” NRN reports.
“One out of four opted for Kroger instead of a restaurant,” Maze writes. “And the restaurant they’d have eaten at otherwise was McDonald’s, and it’s not particularly close.”
Kroger has one benefit over McDonald’s — convenience.
Rather than making an additional stop for dinner, customers can get food while filling up their gas tanks or stocking up on groceries.
Kroger has started offering more prepared foods such as sandwiches, soups, and hot foods.
The strategy seems to be working — Kroger has posted 45 quarters of consecutive same-store-sales growth. Meanwhile, McDonald’s sales were down 0.7% globally in the second quarter.
Kroger, which has 2,000 locations, is continuing to innovate by selling more organic foods.
Selling more organic food will attract high-end customers and help drive profits at Kroger, according to JPMorgan.
Convenience stores such as Sheetz are also becoming a threat to McDonald’s.
Sheetz offers a variety of food, including pizza, wings, sub sandwiches, pretzel melts, hot dogs, salad wraps, and more.
President and CEO Joe Sheetz has been open about the emphasis the company places on food.
“When we’re new to the area, gasoline gets their attention,” he told PennLive.com. “Once you get their loyalty, we get them to eat. We are really a restaurant advertising a bunch of other stuff.”
The chain has about 500 locations concentrated in Pennsylvania, Virginia, Maryland, West Virginia, and Ohio, and it is expanding fast.
Source: Business Insider