• Retail prepared foods cannibalizing QSR lunch visits

Restaurants compete most heavily with retail stores for prepared food orders during the dinner and snacking dayparts, but the strongest visit growth for retail prepared foods has been at lunch, reports The NPD Group. Visits to retail stores for prepared foods at lunch have increased by double-digits since 2008, while restaurant lunch visits have declined, according to a new NPD foodservice market research report, The Retail Prepared Foods Market: Assessing the Competition.

The competitive advantages retail stores— such as supermarkets — have over restaurants, particularly QSRs, include:

  • The availability of healthy options
  • Good variety of foods
  • Light meal offerings
  • Affordability
  • One-stop shopping convenience

These attributes are key drivers for the 29-percent visit growth for retail prepared foods at lunch, reports NPD.

High unemployment and shaky consumer confidence are among the reasons that lunch visits to restaurants have declined by 1 percent since 2008.

More meals at home

Additionally, the growth in the retail prepared foods market is part of a broader trend of Americans consuming more meals in home. A recent NPD forecast through 2022 finds that the instances of prepared food purchased at retailers for at-home consumption will increase by 10 percent throughout the next decade compared to a 4 percent increase forecast for restaurant traffic. The component of the retail prepared food market that is supporting growth is the portion that is purchased and eaten at home or at work for lunch and supper.

"It's fact that retail prepared foods are taking visits away from restaurants and restaurant visits are not expected to grow much over the next decade, but there is also significant opportunity for foodservice operators to meet consumers' needs for prepared foods," said Bonnie Riggs, NPD restaurant industry analyst. "Learning more about how consumers use retail stores for their foodservice-type meals enable restaurant operators and their supplier partners to understand how to better compete in this area of growing consumer demand."

Read more about restaurant trends.

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