Consumer Trends

Lower grocery inflation is pulling consumers away from restaurants, study finds

About 25% of shoppers cooked for themselves or purchased ready-to-eat supermarket items during 2023, compared with a 17% rate last year.
The new research also shows an increase in consumers' reliance on hybrid meals, where prepared items are combined with elements made from scratch. | Photo: Shutterstock

About 1 in 4 consumers replaced restaurant meals with foodservice options from grocery stores in 2023, an increase of 17% from last year, according to new research from the retail trade association FMI.

Shoppers are also cooking at home more often and creating hybrid meals that combine premade items with those made from scratch, according to a report from the group, The Food Industry Association’s Power of Foodservice at Retail report.  

"For years, we’ve found that shoppers simply did not think of the grocery foodservice department when planning their meals. But, as shoppers continue to prepare more meals at home, that trend is changing," said Rick Stein, vice president of fresh foods at FMI, in a statement. “Shoppers are creating hybrid meals, which include some scratch cooking with some pre-prepared items. This hybrid meal approach means shoppers want convenience and experience and they are finding it in the foodservice, deli and bakery departments.”   

The research showing increased purchases of foodservice fare from grocery stores is backed by NIQ (NielsenIQ) data that shows spending at deli counters grew 4.2% to $49.9 billion year over year for the week ended Oct. 7. Meanwhile, deli traffic declined 1.7% during the same period.

The NIQ report added that over 70% of households purchased deli foodservice products, with shoppers making an average of 9.8 purchases per year. That trend is expected to continue, as more than two-thirds of consumers (68%) plan to continue purchasing restaurant-like products from groceries, while 1 in 5 intend to increase such purchases.  

Sales of foodservice and prepared items also increased to $18.5 billion for the year, up 4.7%. Foodservice/prepared orders fell 1.8% over the same period.  The situation mirrors what’s happening in the restaurant market, where sales are up because of price inflation, while traffic has slipped.

Nearly half (47%) of shoppers told FMI that cost was the top reason for purchasing restaurant-like fare from supermarkets. That was followed by taste at 43%; cravings for a particular dish, cuisine or taste at 42%; value at 37%; time and effort involved at 35%; availability of options (such as the proximity to a restaurant) at 33%; how soon the meal can be eaten at 26%; and healthy eating considerations at 25%. 

The report also noted that there is room for growth in the healthy options offered at grocery stores’ foodservice counters. Only a third of consumers were satisfied with healthy options available, while 65% expressed interest in healthy and nutritional options. Similarly, two-thirds said that they also consider at least one nutritional claim while shopping in the specialty bakery department.  

"Retailers need to adopt a restaurant-like mentality for foodservice and deli. Present features that shoppers appreciate, including online ordering, easy pick-up and delivery, to boost the convenience factor,” Stein said. “For the bakery, freshness is still a top priority for shoppers as is the ability to round out their meals with items like bread rolls or dessert options.

“Adding technology features that offer convenience is also part of delivering in-store bakery shoppers value," he said.

Retailers should highlight the comparative value of foodservice relative to restaurants, because shoppers already see it as a good deal, Stein wrote Friday in a blog post co-authored with Steve Markenson, VP of research and insights at FMI.

Retail foodservice providers should follow the lead of restaurants by offering restaurant-like amenities. “Topping the list are having a menu available online, enabling advance ordering through apps and offering drive-throughs for pickup,” Stein and Markenson wrote. 

The blog post added that 40% of shoppers expressed the need for help with meal planning, opening opportunities for retailers to offer “meal bundles, in-store displays that bring together the ingredients for a meal, providing ideas through retailer apps and more heat-and-eat choices.” 

Editor's note: This story originally appeared on the website of Winsight Grocery Business, a Restaurant Business sister channel serving the retail food market.

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