OPINIONOperations

Here’s a new $5 meal deal looking to compete with fast food

Retail Watch: As companies look to lure inflation-weary consumers, a grocer makes a major value play. Plus, Foxtrot’s assets sold and Beyond Meat’s struggles.
Harris Teeter
Harris Teeter is debuting a $5 meal deal. | Photo: Shutterstock

Retail Watch

A certain Chicago-based burger giant is getting all the headlines and airtime for its proposal to debut a $5 value bundle to lure inflation-pressed diners back into its restaurants.

It’s little wonder McDonald’s is getting so much attention. What the brand is considering is a pretty huge deal: a limited-time meal that would include a McChicken or a McDouble, plus a four-piece Chicken McNuggets, fries and a soft drink.

As food inflation has risen and plateaued a bit, grocers have had the edge over restaurants. Food-away-from-home prices were up 4.2% for the year last month, compared to an increase of just 1.2% at food retailers, according to data from the U.S. Bureau of Labor Statistics.

But Kroger-owned grocery chain Harris Teeter is looking to widen that gap even further, rolling out a limited-time $5 Meal Days program at some of its stores in Washington, D.C., and Northern Virginia.

“As the cost of dining out continues to rise, Harris Teeter is committed to providing its customers with the freshest and highest-quality products at unbeatable process to enjoy with family and friends,” Harris Teeter said in a statement, adding that shoppers can round out the meals with other grocery items.

Each day of the week has a different $5 offer, including whole cheese and pepperoni pizzas, rotisserie chicken, green salads from the deli, eight pieces fried or baked chicken and select sushi items.

If grocers could develop signature foodservice items and get their speedy delivery operations in order, they could give QSRs some real competition. Fortunately for restaurants, grocers still have a long way to go on those fronts.

Foxtrot’s assets sold

Urban convenience store-restaurant hybrid Foxtrot, which abruptly closed all 33 of its stores last month, sold its assets for about $2.2 million at an auction Friday, according to sister publication CSP Daily News, citing Crain’s Chicago Business. It was an underwhelming end to a concept once billed as the “convenience store of the future” that had raised more than $160 million in funding since it began in 2014.

The assets of two-unit grocery-restaurant hybrid Dom’s Kitchen & Market were also up for auction, but were not sold, Crain’s reported. Less than six months ago, Foxtrot and Dom’s merged to form Outfox Hospitality.

The auction took place over a Microsoft Teams call.

Holding company Further Point Enterprises purchased Foxtrot’s assets. The company’s portfolio also includes Odd Bird, Bandits NYC and more.

Faux meats continue to struggle

Beyond Meat, maker of plant-based meat alternatives that were once thought to be part of a revolution in both retail and restaurant offerings, keeps sliding.

Last week, the company reported a net loss of $54.4 million during its first quarter, with net revenues of $75.6 million, an 18% drop over the prior year.

And much of those losses are due to declining interest from restaurants and retailers in the plant-based meat analogues that closely mimic the real deal. U.S. retail net revenues fell 16% to $37.1 million during the quarter, while foodservice net revenues dropped 16.2% to $12.3 million during the period, Beyond reported.

“One of the biggest challenges our brand has faced is orchestrated misinformation regarding our product lines,” Beyond Meat CEO Ethan Walden Brown told analysts, according to a transcript from financial services site AlphaSense.

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