How grocery stores are reshaping Foodservice

The rise of supermarket-driven dining

While the foodservice industry was recovering from Covid-19, another trend that emerged during the pandemic—and has since become more established—is the increasing share of ready-to-eat (RTE) foods sold in supermarkets.

Recent data from Circana illustrates this steady growth: in Europe, restaurants with or without table service saw their market share in out-of-home dining decline from 79% in 2021 to 77% in 2024, while non-commercial channels—RTE food sold at supermarkets, vending machines, gas stations, and on-board service—gained ground.

Further insights from Circana reveal that, in 2024, retail spending in foodservice in Europe reached 18.1 billion euros, marking a 47% increase since 2020. France holds the largest market share at 6.8%, while Italy follows with 3.5%.

Data from Mintel related to the US helps us understand the two main drivers behind this trend:

• Convenience: During Covid-19 restrictions, when people could only leave home for urgent needs, buying RTE food at the supermarket rather than ordering takeaway from local restaurants allowed them to get home more quickly. After the pandemic, the convenience of being already at the store continued to appeal to consumers and is, in fact, the most quoted reason (49% of respondents) for purchasing prepared foods in supermarkets.
• Inflation: RTE food costs more but saves time, making it an acceptable tradeoff for consumers. However, in times of increased financial pressure due to inflation, the lower cost of RTE food at grocery stores compared to restaurant takeaways, made this tradeoff even more advantageous. Inflation in the food-at-home segment is easing more quickly than in the away-from-home segment, which is keeping this trend steady.

Other insights from Mintel data are:

• While family dinners are the main reason for buying RTE foods at grocery stores, other frequent ones are solo dinners and lunch at home or on the go.
• Chicken—especially rotisserie and fried—remains a staple of prepared meals, making up 74% of RTE food purchases in retail in 2024.
• The increased share of foodservice sales in retail is also the result of grocery stores’ efforts to improve this segment. The majority of purchasers acknowledge that the quality of prepared foods at grocery stores has improved in recent years.

From shopping carts to dining tables

This hybridization of retail and foodservice, however, also takes more advanced forms.

Spanish chain Mercadona offers a wide range of RTE dishes (tortillas, paellas, but also lasagnas and meatballs) in 1200 of its 1600 stores and provides microwaves to heat them, as well as cutlery and tables to eat without leaving the premises.

• Conad, Italy’s largest grocery chain by revenue, opened 28 self-service locations called Punto Ristoro that offer two course meals for less than 10 euros. UK chain Tesco opened more than 300 cafeterias across the UK that also offer lunch and breakfast menus.
• Iperspar, one of the brands operating in Italy of the Dutch grocery franchise SPAR, opened nine restaurants and developed different brands of takeaway foods (ramen, fried chicken, etc.) located in-store. Leading Swiss grocer Coop serves Thai and Italian food in its stores in addition to the typical ready-to-eat food offer, and operates 180 self-service restaurants right next to its supermarkets.
• Esselunga opened its first Bar Atlantic in 2003 and has since expanded to more than 100 locations. These in-store cafés offer a variety of freshly prepared foods, including sandwiches, salads, hot meals, and coffee, catering to customers seeking quick, convenient dining options while shopping.

Food brands creating dine-in experiences

Another form of hybridization is food brands taking the classic flagship store concept a step further, by offering ready-to-eat options and the possibility to eat at the store. Below are a few notable examples:

• Bauli: The Italian bakery brand known for its pandoro, panettone, colomba and croissants, opened 13 Minuto Bauli locations (one of them in Vienna). Minuto Bauli is a café-patisserie concept where freshly baked mini pandoro cakes are made on-site.
• Fazer: The Finnish confectionary brand has expanded its traditional retail sales channel through over 40 Fazer Cafés across Finland. These locations serve their chocolates and confections along with pastries, bread, and full meals.
• Mövenpick: the Swiss ice cream brand co-owned by Nestle operates three sales channels, such as in-house production for the restaurant chain of the same group, ice cream parlors and retail.
• Fattorie Garofalo:  The buffalo mozzarella manufacturer operates 14 stores in strategic locations such as airports, main railway stations and shopping centres, offering mozzarella-based meals for takeaway or to eat at the store.
• Bindi: The Italian pastry brand, specializing in gelato, semifreddo, and frozen desserts, operates through a multi-channel business model that includes direct-to-consumer online sales, supplying restaurants, and running its own pastry stores.

New market realities

The line between foodservice and retail has blurred considerably, with consumers expecting more from their shopping and dining experiences. As this trend continues, businesses on both sides must explore new sales channels and innovative ways to expand their brand presence if they want to tap into new opportunities.