Industry News | February 16, 2012

Grocery Retailers are Winning Over Restaurant Customers

Recent consumer research by food industry consultants Technomic indicates that retailers' prepared food offerings have evolved to the point that they are viable alternatives to all types of restaurants.

Forty percent of consumers surveyed in Southern California agree that "prepared foods from retailers are restaurant-quality foods at better prices." Nearly two-thirds say they've seen significant improvements in the quality and variety of retailer prepared foods over the past five years.

Technomic defines retailer meal solutions (RMS) as prepared (or partially prepared) foods that are found in sections of the store where consumers can pick up ready-to-eat or ready-to-heat items from service counters or self-service/grab-and-go areas (e.g., an expanded deli section).

These are products that do not require extensive preparation beyond reheating (if applicable). They might be refrigerated, but they are not frozen. Examples include rotisserie chicken, sushi, sandwiches, pizza, salads, soups, side dishes, etc.

"Retailers' prepared foods programs have evolved to the point that they are considered viable alternatives to restaurants of all types and service styles, from full- and quick-service to upscale and more affordable concepts," says Jenny Anderson, who directs Technomic's RMS Monitor service. "The appeal goes well beyond convenience and value. Consumers clearly recognize enhancements that are based on restaurant influences."

Technomic found that all restaurant segments are losing visits to retailers, but lower-priced restaurants are impacted the most.

Among surveyed consumers who say they are visiting restaurants less often, it is family style, upscale fast food, and traditional fast food that are hit hardest. More than two-thirds of these consumers are cutting back on visits to these restaurants.

Retailers' products have always competed well on convenience and value. But when asked if retailers are better or worse than restaurants on 14 different product attributes, retailers consistently fared better than restaurants, including food/ingredient quality, freshness, number of better-for-you choices, and availability of premium items.

Technomic continually tracks developments in this category through its RMS Monitor program.