The Food-to-Go market is worth £4.4bn as more people buy their lunch, rather than making it at home. Retail sources said that the shops’ prime locations and their extortionate rents had made the sites unprofitable.
Tesco opened two only “Food-to-Go” stores in London in 2014 which were opened to attract busy commuters and offered rotated breakfast, lunch and early afternoon ranges, with 50 different types of sandwiches, hot food to go items and sushi.
Now 18 months later Tesco is shutting both branches, but Tesco is not the first grocer to fail to crack the market, Sainsbury’s Fresh kitchen opened in Holborn in 2011 but closed a year later.
Tesco opted to buy in expertise for in-store foodservice, using Harris and Hoole and restaurant chain Giraffe adopting a similar strategy in into food-to-go offer partnering with both deli business Fred’s and Burrito Kitchen, the latter still open today. Sainsbury’s didn’t bring anything new to their attempt at food-to-go which could be the reason for closing.
Niche is important, would a consumer prefer a Tesco burrito or go to the latest pop up around the corner?
M&S simply food has gone beyond selling sandwiches to office workers by also selling food for the evening with its famous dine in for 2 offers.
Kantar Retail analyst Ray Gaul wonders whether a perceived lack of quality may have hit demand for Tesco’s food-to-go stores, there has been a move upmarket in sandwich chains, driven by a growth of operators offering bespoke products.
Location is key, central London locations chosen for Tesco and Sainsbury pilots may have hampered their success, the area is competitive and if locations were chosen away from London, it may have been a success.