How shrinking baskets and demand for grab-and-go food are upending the grocery business
Peter J. Thompson/National PostMichael Pugliese, CEO of Michael-Angelo's, a purveyor of fine foods in the greater Toronto area, discovered two things in 2013: the average size of grocery baskets were shrinking and people were shopping more frequently.
Michael Pugliese knows when change is in the air. It’s an instinct that comes naturally after decades of experience in the retail grocery trade.
The chief executive of Michael-Angelo’s, a purveyor of fine foods in the greater Toronto area, discovered two things in 2013: the average size of grocery baskets were shrinking and people were shopping more frequently.
“We could see that customers wanted more from us in terms of fresh products, personal service and convenience,” he said.
There were other more subtle changes in consumer spending habits, he said. Such as that fresh produce was outpacing boxed goods; and demand for catering services was taking off at an exponential rate. (It saw double-digit growth in the past five years).
Changing the business model of the store Michael and his sisters RoseAnn and Sandra, took over from their father Angelo, to stay in step, turned the tables for the grocer’s Markham, Ont. location.
Pugliese downsized operations from 50,000 to 15,000 sq. ft.; scaled down his product selection; and converted the space into a gathering place for discerning foodies. He added a chef station where patrons can order freshly cooked breakfasts, lunches or snacks and savour them in the on-site café area. There’s also a new fresh gelato and juice bar, as well as a gourmet grab-and-go packaged food section for shoppers on the run.
The result of this grand makeover is that despite the significant shrinkage in floor space, revenues haven’t declined. “In fact they’re growing. I don’t think there are many retailers who can say that,” Pugliese said.
Peter J. Thompson/National PostThe produce section of the redesigned Michael-Angelo's in Markham, Ont.
Peter J. Thompson/National PostMichael-Angelo’s new bakery and café counter.
With two other Michael-Angelo’s locations — in Mississauga and Hamilton, and another planned to open later this year, Pugliese said the Markham store was an important test bed. He’s finding that the more intimate approach so far is resonating with shoppers. “It’s an appealing option for people who can’t cook, or don’t have time to.”
The time-pressed gourmet consumer is becoming a lucrative market for innovative business thinkers, from retail store makeovers to e-commerce offerings to out-of-the-box catering. Jamie Shea, co-founder of Chef’s Plate, an online curated meal service that delivers gourmet ingredients and recipes to your door, said consumers are increasingly looking at ways to eat healthier without the effort and expense of making it on their own.
One compelling trend driving time-strapped gourmet consumers is the move to online grocery sales. “It is becoming the final frontier for e-commerce,” Shea said. “Everything else – books, music, apparel – has moved online. Now it’s food.”
Peter J. Thompson/National Post
Online sales have evolved dramatically since Grocery Gateway launched in the early 2000s, as has consumers’ aptitude for buying food products online, he added. “Gourmet is more mainstream with shows like Master Chef Canada. And food is now the third-most-shared thing on social media after travel and pets. But there is an incredible gap between watching and consuming food and getting into the kitchen to make it. Cooking is really time consuming; plus you need skills navigating a kitchen. A lot of people don’t have that, but still love a high-end meal.”
Since its launch in November 2014, Chef’s Plate has had double-digit growth week after week, Shea said. The company has grown to 70 employees from five, and is expanding its delivery circles from Toronto to other regions in Ontario. Chef’s Plate plans to become a national operation with 200 employees by the end of the year.
Peter J. Thompson/National PostA photo of founder Angelo Pugliese and his family, hangs at the back of Michael-Angelo's Markham, Ont. location.
Peter J. Thompson/National PostMichael Pugliese, CEO of Michael-Angelo’s at the Markham location's chef station.
Even caterers are carving their own niche to help out cooking-challenged consumers that crave quality home-cooked fare. Railtown Catering in Vancouver not only serves up typical corporate and wedding fare, it recently added a full-fledged home meal offering for special occasions. “We’re really trying to figure out different ways to get people well fed who don’t have time to prepare and cook food at home,” Dan Olson, Railtown’s co-owner, said
“We have to come at this with a fresh approach and give customers something new,” Olson added. He noted that the catering venture is competing with companies that have been in business 25 years.
Credit: Jelger + Tanja PhotographersDan Olson of Railtown Catering.
Its Thanksgiving Turkey-to-Go package is designed to feed up to a dozen people and includes 13 items for less than $30 a person. Offering include an organic roast turkey and stuffing, salads, sauces and trimmings. When Railtown Catering brought it back for Christmas, it sold twice as many, Olson said.
“It’s more a timing issue for people,” he said. “They want a good quality meal but to cook it is time consuming, logistically difficult and expensive.”
With two successful holidays under its belt, Olson said Railtown Catering is experimenting with other offerings. “We’re learning as we go and seeing what works. It all comes down to quality and being able to get out to those people who have less and less time to recreate meals from scratch. It’s no longer rotisserie chickens in black containers.
“Consumers have options now.”
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