Even Chain Restaurants Are Selling Groceries to Stay in Business

Subway is selling tomatoes, California Pizza Kitchen is selling beer, and more chains are sure to follow.

Restaurants are struggling. Ninety-seven percent of restaurants nationwide have now been impacted by coronavirus-related restrictions, causing transactions to drop by 42 percent for the week ending March 29 compared to last year, according to the NPD Group. So to boost revenue, restaurants are getting creative. Plenty of independent eateries across the country have begun selling grocery items alongside their usual fare, and some areas have been relaxing laws to make this pivot easier. Now, even the big players are recognizing this opportunity as some of America’s largest chains are attempting to offer supermarket-style goods.

a bag of grocery items from CPK market
California Pizza Kitchen

Panera Bread, California Pizza Kitchen, and even Subway are a few of the dining chains now dabbling in the grocery game since the COVID-19 outbreak has caused interest in supermarket delivery to skyrocket. As of Monday, Panera began offering things like bread, milk, and produce online for either delivery or pickup. Last Tuesday, California Pizza Kitchen introduced CPK Market, which not only features CPK Meal Kits like a lettuce wrap kit and build-your-own-pizza kits for kids, but also basics like milk, rice flour, meat, dry pasta, Goldfish crackers, and beer. And over 250 Subway locations across California, Connecticut, Oregon, Tennessee, and Washington are now offering Subway Grocery—billed as a chance to “skip the line and get grocery essentials delivered” including items familiar to Subway customers like fresh baked rolls, 2-pound packs of salami, and whole red onions and tomatoes.

“It’s a win for our associates because we will be able to keep our cafes open longer, and it’s great from a business standpoint because it should be incremental profit and revenue for us at a time when we desperately need it,” Panera CEO Niren Chaudhary told CNBC.

But though benefits exist for restaurants, California Pizza Kitchen’s Senior Vice President of Marketing Ashley Ceraolo also spoke about the advantage for customers during these difficult times, too. “With food access currently top-of-mind for us all, we wanted to find new and creative at-home cooking solutions to ensure our guests and the communities in which we serve have as many high-quality fare options as possible,” she said in her company’s announcement. “Given the entire country is dining differently and family mealtime is more important than ever, establishing a concept where guests could confidently purchase affordable produce, meat, and other essential pantry items was the best way we felt we could attend to immediate needs while still doing what we do best—serving our customers the most delicious food options available.”

Meanwhile, imagine the opportunity for a chain like Subway with over 24,000 locations. Granted, not everyone wants a massive supply of lettuce and sliced cheese, but the brand certainly has a wider reach than a lot of traditional grocery stores. Still, the new initiative is just getting off the ground. As Bob Grewal, a development agent with rights to Subway restaurants in a handful of areas across the country, told Nation’s Restaurant News: “Before we run, we need to walk.”

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