brand extensions

Arby’s Heads for the Aisles

Posted by Dale Buss on June 16, 2010 12:00 PM

Supermarkets are the last refuge for an increasing number of distressed quick-serve brands. Arby’s is the latest example of the trend toward putting restaurant-branded products in the grocery aisle.

The struggling Atlanta-based fast feeder, part of the Wendy’s/Arby’s Group, said that it had reached a deal with Nancy Bailey & Associates, an Atlanta-based marketing firm, to begin fielding offers to sell packaged Arby’s items on supermarket shelves. Nancy Bailey is a well-regarded licensing go-between that, for example, does lots of business with Procter & Gamble.

But what would Arby’s peddle at your local grocer? That’s hard to foresee. Maybe its mozzarella sticks, in the frozen-food aisle? Pre-packaged jamocha shakes? It wouldn’t seem to be feasible to sell fresh roast-beef-and-cheddar sandwiches anywhere in the supermarket. Previously for a time, Arby’s peddled its iconic sauces, such as Horsey Sauce, at retail.

Some restaurant chains have been fairly successful at this sort of gambit, including California Pizza Kitchen and P.F. Chang’s. Burger King sells its Apple Fries snacks in supermarket snack aisles. Jamba Juice is another challenged chain, like Arby’s, that also has turned to this tactic.

Arby’s needs to try something. Its parent company reported an 11.5-percent drop in same-store sales at Arby’s outlets for the first quarter. Wendy’s/Arby’s share price has been dropping though some Wall Street analysts predict a turnaround. Potential acquirers reportedly are sniffing around the company.

But while Arby’s may enter the retail arena again, such a move would comprise nothing more than a Band-Aid. The chain needs to give American consumers a compelling reason beyond its “5 for $5” promotions to go to Arby’s again. By and large, it’s a pricey brand, caught between its premium positioning and a currently penurious public.

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