On top of that, the food cost has remained relative low over time, widening the price gap for the food purchased in a supermarket and a restaurant. That is a major reason why I see supermarkets are becoming a product-category competitor for restaurants.
In my recent discussion on Multibriefs.com, I first described the differences among four levels of competitions --- product-form, product-category, generic, and budget level competition. Traditionally, supermarkets are not considered a product-category competitor for restaurants, but...
More supermarkets are offering restaurant service, selling food with a much lower price. I have seen people eating and drinking in some high-end supermarkets, such as Whole Foods as if they were eating in a casual dining restaurant.
Grab-n-go is getting better in supermarkets. So are those ready-to-cook packages. Whole Foods recently introduced the butchering service for fresh produce.
No tipping becomes an emerging trend in restaurants. So, the differences between a restaurant and a supermarket are not that clear anymore.
So, do you also see supermarkets are becoming a big threat to restaurants? What shall restaurants do in responding to the threat coming from supermarkets?