Industry News | July 17, 2013

Restaurants To Face Competition From Retailers

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Home meal replacements or prepared foods from supermarkets, drug stores, and other retail outlets will continue to capture share of the meal/snacks market by stealing visits from restaurants, according to The NPD Group, a leading global information company. 

NPD’s recent foodservice forecast through 2022 indicates that instances of prepared food purchased at retailers for at-home consumption will increase by 10 percent over the next decade, compared to a 4 percent increase forecast for commercial foodservice traffic.

While there is no one age group that takes greater advantage of the prepared food offerings from retail outlets than another, the needs being met do differ by age group, according to NPD’s “A Look Into the Future of Foodservice” study. 

For example, adults 35 years and older are more likely than 18–34 year olds to use prepared foods from retail to meet their in-home supper needs. Lunch-at-home interests are also met by these retailers, especially for seniors (65+). 

Consumers 18–24 are more inclined than others to make purchases from these retail outlets to satisfy their interest in afternoon or evening snacks. 

In terms of prepared foods purchased, younger adults are more likely than those older to purchase pizza, hot dogs, and burgers to eat at home. Consumers older than 50 are interested in purchasing both fried and non-fried chicken. Younger adults are more inclined to order non-fried chicken than fried chicken.

The home meal replacement entrees purchased most frequently from retail outlets include chicken, pizza, and macaroni and cheese. Sandwiches are also popular take-home items.

Acknowledging the growth in the number of Baby Boomers moving into their senior years, the larger share of home meal replacement purchases from retailers will source to those older than 65 years over the next 10 years, NPD reports. Prepared foods retailers are also expected to benefit from increased visiting from those in their 30s.

“Capturing visits from direct competition, like prepared foods retailers, has been the primary source for a restaurant operator’s growth over the past 10 years, and this will continue to be the case,” says Bonnie Riggs, NPD restaurant industry analyst. “Efforts to pull consumers out of their homes and back into restaurants will require touting the benefits of eating out versus staying at home and cooking or eating meals offered by home meal replacement retailers.”