Walmart testing new in-store restaurant partner

Date : 13 September 2016

Walmart is partnering with Isaac Rousso to open a new restaurant concept, ‘State Fair Eats’ at its store in Plano, Texas.

Featuring renowned food offer from State Fair of Texas

Rousso has developed a loyal customer base and strong following in Texas due to the State Fair of Texas where he has been one of the most sought after foodservice providers. The entrepreneur has developed a range of businesses based on this including a food truck concept and a standalone restaurant/diner. This initial test could lead to further expansion within Walmart.

Builds on food truck test at Rogers Supercenter

While many Walmart stores in the US typically feature a McDonald’s, Subway or other major chain, the retailer has been testing other concepts as part of its reinvention of the Supercenter. At its Supercenter in Rogers, Arkansas, where the retailer has introduced a refreshed look and is testing new approaches to technologies, services, products and layouts, it has partnered with a local food truck operator, ‘Big Rub’. This forms part of an enhanced focus on food-to-go, which includes BBQ meats alongside its rotisserie chicken offer, and custom pizza and sandwiches programs.

Source: IGD Research

Target and Whole Foods Market experimenting with new partners

Walmart is not alone in testing new in-store dining concepts. Target is partnering with a range of local and national operators as it seeks to build a more relevant food offer for its shoppers. As part of its ‘LA25’ testing initiative in Los Angeles, a number of the stores feature outlets from the ‘Which Which’ sandwich chain, while later this year, the retailer will open a new store in New York featuring a Chobani branded café. Whole Foods Market, at its new 365 by Whole Foods Market format, is also partnering with a range of local food operators on a store by store basis.

Source: IGD Research

Aiming to drive traffic and create a point of difference

Retailers are placing an increased focus on this element of the store offer in order to create a point of difference and feature brands that can help drive traffic to their stores. As an increasing proportion of sales shift online, particularly non-food sales for Walmart and Target, the retailers are aiming to provide new reasons for shoppers to visit their stores, and in the case of Walmart’s tests, with a locally-relevant lens.

Potential to add complexity, but significant opportunity for new partners

One of the key challenges for the retailers is that this adds a layer of complexity as leasing agreements have to be agreed on a store by store, or regional basis, and there are also likely to be a number of operational challenges as these new companies adapt to trading in a very different environment. However, the partnerships have the potential to significantly change the scale of many of these businesses, providing them with a new platform for growth.

Stewart Samuel, Program Director, IGD Canada
Based in Canada, Stewart heads up all of IGD's research and coverage on Walmart globally. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region.

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