Restaurants Partner With Kroger and Other Grocers to Boost off-Premise Sales

This week in restaurants, eateries expand to grocery stores, add ghost kitchens and face regulations.

Throughout the last couple of years, restaurants have been seizing on the opportunity to attract new customers in highly trafficked areas by teaming up with grocers to offer in-store locations.

Most recently, Southern California boba tea chain Percolate partnered with specialty grocer Sprouts Farmers Market, which has 380 stores in 23 states, to open an in-store tea spot in Los in early February, Progressive Grocer reported.

It is not only grab-and-go spots. Last month, Charlotte, North Carolina, news outlet The Charlotte Observer reported on the opening of a new supermarket, Super G Mart, with a full-service restaurant in addition to a food hall.

“That kind of symbiotic relationship will really turn this into the next level for shopping and dining experience,” Peter Han, the grocer’s vice president of business development, told the outlet.

Meanwhile, Kroger has been expanding its partnership with ghost kitchen company Kitchen United to offer its own in-store food halls. Last month, fast-casual salad chain Saladworks announced it would expand its in-Kroger presence with locations at two new Kitchen United Mix Food Hall locations in Columbus, Ohio.

These kinds of partnerships also allow grocers to stay relevant as consumers’ food habits shift toward restaurants.

“The dynamic of the 1950s where somebody would cook six square meals a week and maybe go out once a week is going to be totally the opposite,” Marc Choy, president of Ghost Kitchen Brands, told Karen Webster in an interview. “This is how people are going to know how to get their food — by ordering.”

California’s QSRs Wait on Vote From the Public on Fast-Food Bill

After months of activity surrounding California’s Assembly Bill 257, which would mandate changes to fast-food employees’ wages and working conditions, the state’s restaurants and legislators are now waiting on a vote from the public.

Secretary of State Shirley Weber’s office shared Jan. 14 that the fast-food industry’s referendum challenging the bill had received enough qualified signatures to require the act, which was passed by legislators, to be put to voters in the state’s November 2024 election. The law cannot be enforced before that vote. Weber’s office counted more than 712,000 signatures from registered voters projected to be valid.

The announcement spotlights the power of the industry’s lobbying efforts, including those of coalition Save Local Restaurants, which is backed by major restaurant brands including In-N-Out Burger, Chipotle Mexican Grill and Starbucks.

“Now more than 1 million Californians have spoken out to prevent this misguided policy from driving food prices higher and destroying local businesses and the jobs they create,” International Franchise Association President and CEO Matt Haller said in a statement.

Advocates for the changes proposed in the bill also maintain that the public will rule in their favor.

“Despite fast food corporations’ efforts to distort the referendum process, we know California voters see through their tricks,” Service Employees International Union President Mary Kay Henderson said in a statement, according to AP News. “No corporation is more powerful than half a million workers joining together to demand a seat at the table.”

Chick-fil-A Expands Ghost Kitchen Efforts With Multi-Brand Concept

Chick-fil-A is opening an off-premise-only location dubbed Little Blue Menu with items from the brand and from its virtual offshoots Outfox Wings and Because, Burger, in Nashville, the company announced in a Jan. 19 press release.

The multi-brand location supplements an existing delivery location in the space that only offered items from the core Chick-fil-A menu, and the company will open another such location in College Park, Maryland, later this year.

“The culinary team that developed the restaurants is world-class, and the array of food offerings paired with the option to deliver straight to your doorstep provides guests with more variety, convenience and flexibility,” L.J. Yankosky, senior director of the Beyond the Restaurant team at Chick-fil-A, said in the release.

The news comes as restaurants face mixed results with their ghost kitchen and off-premise-only efforts. Most recently, for instance, casual dining brand Chili’s closed down the pickup and delivery-only concept it was testing in Dallas.

Additionally, on a Jan. 13 earnings call with analysts, quick-service restaurant (QSR) giant Wendy’s discussed the closures of many of its virtual locations in partnership with ghost kitchen company Reef.

When asked about elevated closures in the United States, Wendy’s CEO Todd Penegor noted, “A lot of it has to do with Reef and cleaning that adventure up for us.”