Fast food chains launch versions of grocery stores in the competitive market

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Some Tim Hortons products are available on the shelves of major supermarkets in Canada.

Fred Lum

Fast food enthusiasts no longer have to go – or even order – from their favorite restaurants to indulge, as grocery stores now have a wide range of popular menu items so that superfans can heat up a St- Hubert, spread on Swiss Salsa of chalet sauce or whip up a pot of Tim Hortons homemade chilli at home.

The transition to the sale of restaurant-branded products in the supermarket aisles benefits fast food chains and grocery stores as competition for consumer attention increases.

"This has been a great buzz in the industry," said Robert Carter, a food service analyst with market research firm NPD Group, of increasing the price of restaurants in grocery stores.

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More recently, Tim Hortons presented three of his soups and his chili to supermarket shoppers.

The company started selling its broccoli cream, chicken noodles and chicken and rice soups, as well as homemade chilli at retailers in August, spokeswoman Sarah McConnell said in an e-mail.

The four products are now sold at numerous retailers across Canada – including Sobeys, FreshCo and Shoppers Drug Mart – McConnell wrote, adding that they plan to make the products available indefinitely as "they don't have an end-of-list date" .

This is not Tim's first foray into supermarket aisles. In January, the company announced it would start selling instant coffee, as well as frozen cappuccino and bottled iced coffee drinks.

He also revealed the intention to release a double-double bar, a snack made without chocolate, which according to the company will be available in stores by the end of the year.

The coffee and donut chain is not the only one to expand where it sells its food.

The Quebec-based St-Hubert group first introduced its barbecue sauce in supermarkets in 1965. Since then, the rotisserie restaurant has expanded its supermarket aisle to dozens of items, including a variety of cakes fresh and frozen meat, chicken wings, cans of routine sauce. and fresh cabbage salad.

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The Keg Steakhouse and Bar, a chain based in British Columbia, sells various salad dressings, sauces, marinades and condiments, as well as ribs, burgers and scallops wrapped in bacon.

St-Hubert and the parent company of The Keg, Recipe Unlimited, did not respond to a request for comment.

McDonald's Canada launched Big Mac, McChicken and Filet-O-Fish sandwich sauces for a limited time in 2017 to celebrate its 50th anniversary, spokeswoman Veronica Bart wrote in an e-mail. Bottles sold out of stock, but the burger chain still sells its coffee in grocery stores.

"Competition is becoming so aggressive that all operators are looking for ways to increase revenue streams," said Carter.

Recently, restaurant growth has been relatively stagnant, growing by a few percentage points each year, according to NPD data. Total fast service restaurant traffic for the 12 months ended August 2019 grew by 2%.

"Spending now looks like a really viable opportunity," he said.

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"Moving to grocery stores allows chains to increase their distribution, increase brand awareness and increase customer loyalty in and out of the home," said Carter.

"The bigger you can create your distribution network, the better it will be for your company in general," he said.

While restaurants remain the most important channel, Tim Hortons' regular customers also buy elsewhere.

"We also all know that we take drinks in grocery stores and when we do the weekly shopping, we take soup and coffee for our homes," spokeswoman Jane Almeida wrote in an e-mail.

When supermarket customers look for that can of soup, Tim Hortons just wants it to be their can.

While restaurants can take advantage of the layout of the grocery store, as well as supermarket chains. Food store traffic has been slipping in recent years, Carter said. In an attempt to attract buyers, some supermarkets have turned into groceries, for example by adding a selection of hot foods to consume on the spot.

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Drug dealers are likely to want to introduce products of highly recognizable brands, such as Tim Hortons, that could attract more people, said Carter.

But a possible problem lies in the chains where franchisees can hear supermarkets cannibalize their sales.

For Tim Hortons, the internal analysis and research of the company shows that his retail business is incremental to that of the restaurant and does not affect the profitability of the franchisee, wrote Almeida, adding that some of the products retail of the company are also sold in its coffee shops.

The Great White North Franchisee Association, which calls itself "an alliance of loyal affiliates" that was formed in response to the alleged mismanagement of the chain by the parent company RBI, did not respond to a request for comment on how the group believes that Tim's products are sold outside their restaurants.

Carter imagines that companies implement a sort of plan to avoid the franchisee's discontent, and this seems to be the case with Tim Hortons.

"We have historically and continue to share some of our retail sales with our restaurant owners," wrote Almeida.

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