Faced with layoffs, lower wages and a loss of confidence in the economy, cash-strapped consumers are forgoing restaurant trips, grabbing the wok and cooking at home. Restaurant visits slid 1.5 percent in the three months ending in February versus a year ago, according to Port Washington, N.Y.-based market research firm NPD Group. That followed a 0.8 percent quarterly dip in late 2008, the first such drop since 2003. Consumers may be leaving those pricey restaurant tabs behind, but they don't want to scrimp on enjoyment as they aim to create restaurant-worthy experiences in their own dining rooms.
"This is a great time for natural food grocers," says Shelley Balanko, vice president at the Hartman Group a research and consulting firm in Bellevue, Wash."While people are looking to save money, they don't want to compromise on quality. They're still seeking natural foods, organic foods and anything that creates high quality for them."
So how do you capitalize on this trend? First, emphasize products that offer a double whammy when it comes to value—meaning they are affordable and offer less-tangible but positive attributes. For instance, fair-trade coffees, locally grown produce or humanely produced meats, says Balanko. "Retailers should talk about the product quality—not just that they have the lowest price on milk."
The next step is to make the transition to home cooking as easy as possible for all your customers—whether they are masters of their kitchens or have barely ever turned on their ovens.
Spurred on by a slew of celebrity-chefs, cooking shows and a foodie culture, many consumers are looking to hone their cooking skills through classes and online instruction.
So far this year, New York's Institute of Culinary Education has posted a roughly 10 percent increase in revenues from its nonprofessional cooking programs. "We're seeing a spike in recreational enrollment," says spokeswoman Heidi Noble. But it's not just traditional cooking schools that are benefiting. "We have more questions now about cooking classes and how to cook things," says Liz McCann, education and special projects manager at Mississippi Market Natural Foods Co-op, which operates two stores in St. Paul, Minn. "We're trying to be the grandma who can help you cook all the basics."
"We found that a lot of people had forgotten how to cook," adds Colein Whicher, director of marketing at Sunflower Farmers Market, which operates two dozen stores in six western states.
To help these customers, Sunflower is hosting in-store meal-planning lessons. A Sunflower store in Murray, Utah, recently brought in a local TV personality to do a live demonstration for broadcast, and offered another demo on how to assemble vegan dishes with mostly local, seasonal produce.
Recipe for success
Providing recipes and menu advice—through mailers, in-store promotions or online newsletters—can also help you become a go-to resource for your home-cooking customers.
Mississippi Market uses its website to inform customers about ways to stretch food dollars. For example, the site tells how to roast a chicken and use the leftovers to make two more meals: stir-fried chicken and vegetables, as well as chicken noodle soup. Vegetarian? The site gives instructions for turning cooked lentils into three different high-protein meals: a salad, a soup and an Indian-style dish with potatoes.
The strategy is paying dividends, McCann says. Mississippi Market's sales are up from last year, and shoppers have been heading to the produce section and the bulk aisle to load up on the raw ingredients for their home-cooked masterpieces. Whether they are buying premade dishes or doing it themselves, "people still need good food, even when times are tight," she says.
Beyond the center of the plate
Finally, take advantage of your assets—your store floor is the stage on which to display high-quality natural and organic products in their best light. Cross merchandising is an easy way to inspire your customers to make their meals successful and to keep them coming back to your store. Set up a simple display of spices and organic rice near the poultry section, or showcase ingredients for an ethnic dish or a tofu meal for vegetarians. The most important message to get out to your customers is that your store is a one-stop source for all their needs.
"You want to make it as easy as possible for the consumer to get everything, bring it home and prepare it," says Scott Testa, marketing professor at St. Joseph's University in Philadelphia.
Sunflower has done just that. Its corporate office instructs its stores to display chicken breasts with barbeque sauce and to advise shoppers on matching up meats with dry rubs. Sunflower also suggests selling cluster tomatoes alongside basil, fresh mozzarella and balsamic vinegar—the ingredients for a caprese salad.
Whicher says Sunflower has seen a jump in sales of ingredients that go into main dishes. Among the most popular items: chicken breasts, pasta and pasta sauces. "We're seeing an increase in meat and produce sales as people look for their center-of-the-plate items and build around that."
Writer Roger Fillion of Evergreen, Colo., began cooking at home and making bread long before the economy headed south.