Retail catering on the upswing: Opportunities for modern organic specialist retailers and food retailers

The retail catering sector is benefiting from current trends: more and more people are discovering the reasonably priced but high-quality gastronomic offerings in retail. The reasons for this include increased price sensitivity, high product quality and the rapid availability of food. A study by the Cologne-based retail research institute EHI shows that retail catering achieved record sales of 11.7 billion euros in 2023 - an increase of around 16 per cent compared to the previous year. The Retail Report 2024 confirms this trend and sees the future of retail increasingly in the combination of shopping and experience. Paulina Ullrich, Project Manager Retail Catering at the EHI Retail Institute, explains what opportunities the increased demand offers for organic specialist retailers and food retailers.

From the US ‘grocerant’ trend to a success factor in German retai

Retail catering has its roots in the USA. There, the fusion of food retail and catering has been a focus since the 1970s. Later, the term ‘grocerant’, which is made up of the words ‘grocery’ and ‘restaurant’, became established. In Germany, retail catering, which was influenced by the USA, developed at a later stage - it gained momentum in Germany in the 2000s in particular, when supermarkets such as Edeka and Rewe began to integrate larger catering areas with salad bars, hot counters and bistros in order to respond to the increasing demand for convenience products and tap into additional sources of income. (EHI Study 2024) Today, retail catering is a central component of German food retailing, an important driver of customer loyalty and differentiation in the market and is currently experiencing an upswing.

Growth prospects for the retail catering sector

‘For 2024, we expect growth of 2.8 per cent in the retail catering sector,’ explains Paulina Ullrich, Project Manager Retail Catering at the EHI Retail Institute and co-author of the current study on the topic. ‘After the strong increase of 15.9 per cent in 2023, the increase is more moderate, but the development clearly shows that the market remains on a solid growth path,’ Ullrich quotes from the study.’ The reason for this is the increasing demand for quick, convenient catering options that can be easily integrated into everyday life.

The Retail Report 2024 also shows that additional offers in organic speciality retail and traditional food retail will become even more important in the future. The retail landscape, which has been changed by the crisis, faces the challenge of adapting its strategies in order to reach customers despite declining consumption and growing price sensitivity. A central aspect of the Retail Report is ‘The renaissance of the experience economy’: shopping is more than a functional act - it is becoming an experience. Outstanding customer experiences that appeal emotionally and go beyond the mere purchase of a product are becoming the decisive differentiating factor. This means a shift from pure retail space to multifunctional experience spaces that combine retail, catering and entertainment.

Favourable prices as a success factor - but not alone

Price awareness is an important driver of retail catering, but by no means the only one. ‘The quality of the food, rapid availability and adaptation to different daily rhythms are key success factors,’ says Ullrich. The so-called trading-down effect also plays a role: ‘Many consumers consciously opt for cheaper alternatives due to economic uncertainties.’

Focus on snacks and sustainability

One clear trend is the increasing importance of snacks. ‘Snacking is changing consumption times and playing an increasingly important role in people's everyday lives,’ emphasises Ullrich. However, this does not mean that sustainability has become less important: ‘Many retail catering concepts are already integrating regional products and meat-free alternatives to offer sustainable options. The challenge here is to make customers even more aware of these offerings.

Target groups and their preferences

The age structure of users is also interesting: ‘According to the EHI study on retail catering, two thirds of customers are aged 45 or older. This is mainly due to the best-selling dishes such as schnitzel or other classics, which particularly appeal to this target group. The younger generation, on the other hand, is looking for innovative food trends and experiences that can also be shared on social media,’ is another finding of the study. In this respect, Ullrich sees great potential in creative and trend-conscious offerings in order to broaden the positioning of retail catering.

Creating added value in the food retail

Despite stable customer frequency in food retail, differentiation remains crucial. ‘The competition never sleeps,’ warns Ullrich. ‘Discounters are greatly expanding their snack and to-go offerings and creating additional competition. It is therefore important for organic specialist retailers and food retailers to stand out with innovative catering concepts and therefore offer real added value that strengthens customer loyalty.

Organic specialized trade: Service as a differentiating feature

Retail catering could play a decisive role for the organic specialist trade, which is under increasing pressure. ‘Retail catering has clear goals: higher customer frequency, longer dwell times and an emotional shopping experience. It creates a platform to build deeper emotional customer loyalty through catering offers,’ explains Ullrich. ‘Key success factors include friendly staff who maintain direct contact with customers. The quality of service and close customer relationships, as exemplified by organic speciality retailers, can create clear competitive advantages here.

Staff shortages and energy costs: How retailers are meeting the challenges

Just like traditional catering, retail catering also faces challenges such as staff shortages and rising energy costs. But: ‘The retail sector uses its structural advantages: economies of scale, more efficient use of energy and adapted opening hours offer advantages over traditional catering,’ explains Ullrich. Companies also rely on modern recruiting strategies and internal promotions to attract and retain staff in the long term.

Success stories and future concepts

Retail catering offers numerous successful approaches. ‘Whether it's salad bars, hot counters or upscale catering - the decisive factor is that the offer suits the target group,’ explains Ullrich. As best practice, she cites Edeka Zurheide, which offers its customers a wide range of catering options in addition to a broad supermarket range. The latest project is a gourmet restaurant at the Bottrop site. To create a more intimate feel-good atmosphere, it was separated from the bustling retail shop by doors and window fronts.

An international example of successful retail catering is the Eataly concept from Italy. It combines high-quality Italian food with a culinary experience that not only invites customers to linger, but also to learn and enjoy. 

Vision 2030: Flexibility and digitalisation

A look into the future reveals: ‘The retail catering of the future will be smaller, more modular and more digital,’ predicts Ullrich. To-go offers and convenience concepts will continue to gain in importance, as will the use of artificial intelligence and smart technologies. ‘Automated ordering and payment systems, personalized offers and digital innovations will make processes more efficient and further improve the customer experience.’

For the retail sector, it is clear that those who are able to create experiences that are both emotionally appealing and can be seamlessly integrated into customers' everyday lives will be able to hold their own in the long term and secure a competitive advantage.