Millennials are Abandoning Restaurants for an Unexpected Place

​​​​​Business In​​sider / ​Hayley Peterson / June 14, 2016

Mi​​llennials are giving rise to a new concept: the "gro​​​​​​cerant."​

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A grocerant is a groc​​ery store that offers fresh, restaurant-quality prepared foods.

More and more gro​​cery stores are morphing into grocerants and devoting a larger part of their space to prepared foods in a bid to attract more millennials.

Whole Foods' new chain of st​ores, 365 by Whole Foods Markets, is a perfect example of this trend. Most of the store is devoted to fresh food buffets and a variety of in-store restaurants.

The grocerant strategy is working, accord​​ing to industry research firm NPD Group.

"Restaurant-quality and fresh food, chef-dr​iven menus, and in-store experiences have given rise to the grocerant and inspiration to millennials to visit and spend," NPD wrote in a recent report.

In-store dining and take-out of prepared foods f​​rom grocers has grown nearly 30% since 2008, and accounted for 2.4 billion food-service visits and $10 billion of consumer spending in 2015, according to the report.

​Grocerants get higher marks from consumers in ter​ms of variety and healthy options, compared to fast-food restaurants, NPD reports. Grocery stores' prepared foods are also rated higher for freshness and quality, which are particularly important to millennials, the study found.

"Many grocers now offer restaurant-quality food at a low​er cost than full-service or some fast-casual restaurants," NPD notes.

Grocers are also offering a wide variety of fresh foods in sp​​ecialty categories such as Asian, seafood, Italian, Mexican, and barbecue.

A growing number of grocery stores are also offering dine-in sea​ting for customers.

David Portalatin, vice president of industry analysis at NPD G​​roup, said:

Millennials' interest in the benefits and experience supe​​rmarket food-service offers will continue to be strong over the next several years. This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group. Give the millennials what they want - fresh, healthier fare and a decent price - and they will come.

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