Grocers Feeling the Heat From Restaurants in Prepared Foods

Feb 06, 2013

With the economy showing some recovery, consumers are purchasing fewer prepared meals from supermarkets, according to a study from Technomic.

According to the study, 38 percent of today’s consumers say they purchase retailer meal solutions (RMS) from traditional supermarkets each week compared to 42 percent who said the same in 2010.

"These consumers may be reversing the patterns they set a couple of years ago by heading back to restaurants," says Darren Tristano, VP of Technomic. "For retailers to gain or maintain their share of foodservice dollars, they’ll need to clearly stand out from restaurants, especially since our data shows that consumers’ expectations are rising for the taste, quality, freshness and appearance of retailer prepared foods."

Some findings from the study:

  • Some of the top RMS menu trends include signature fried snacks, more variety for vegetable sides, higher-quality pizzas, a distinct specialty focus for sandwiches and burgers, and a move toward ethnic flavors.
  • Opportunities exist for retailers to leverage their customization options to compete with restaurants; only 38 percent of consumers agree that retail prepared foods allow for more customization than food purchased from a restaurant.
  • Though half of consumers think the quality of prepared foods has greatly improved since 2010, nearly two-fifths call for more name-brand foods that typically denote a higher quality perception.
  • More than two-fifths of consumers who purchase RMS at least once a month (43 percent) say they do so four or more times per month, meaning they purchase RMS at least once a week.

Technomic based its on findings from a survey of 1,500 consumers as well as an analysis of menu profiles from 20 supermarkets.

Is an improving economy the main reason behind Technomic’s findings that consumers are buying fewer prepared meals from supermarkets? What steps should grocers be taking to increase the appeal of their prepared foods offerings?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

10 Comments on "Grocers Feeling the Heat From Restaurants in Prepared Foods"

Sort by:   newest | oldest | most voted
Bob Phibbs
9 years 3 months ago

I think the biggest thing many grocers have to deal with is how many RMS just don’t look appetizing. The best use multiple levels, discrete signage and an abundance of fresh products that make you want to take them home and enjoy—not settle for leftovers from yesterday’s Hometown Buffet.

Gene Hoffman
Gene Hoffman
9 years 3 months ago

Consumers increasingly are seeking more freedoms: freedom of speech, worship, gun ownership, cohabitation and in eating venues. And their eating choices don’t seem to be bent toward “reheat it yourself” or eat alone. This tends to favor restaurants slightly over supermarket prepared meals, particularly as the economy is perceived to be improving.

Supermarkets have to re-test their mettle and imagination to groove into this emergence.

Liz Crawford
9 years 3 months ago

Remember 2008 when grocery experienced a boom, due to a drop in restaurant-going? The grocers (and most of the CPG industry) hoped that those revived grocery-shopping habits would persist after economic recovery.

To re-entrench consumers in grocery shopping, as well as eating and entertaining at home, many retailers amped up their total “meal solutions” efforts. Grocery didn’t have to compete as intensely with Fast Casual and take-out, because shoppers were an audience held captive by the recession.

The increase in restaurant and take-out is the surest indicator of economic recovery. This means that consumers have enough income and confidence to choose convenience and indulgence over labor (shopping, cooking, cleaning up).

The question now is whether the grocery and CPG industry has created enough of a real “meal solution” to maintain its share of stomach.

Ed Rosenbaum
9 years 3 months ago

First, I do not see this as a serious threat to the restaurant industry. Far from it. The grocery industry is still trying to figure out how to to it right. Not only does it have to be appetizing; it has to be price appealing.

Tony Orlando
9 years 3 months ago

The opportunity has never been better than it is to stand out in take-home deli foods. The problem lies within the store or chain stores themselves. The sameness of selection (fried chicken, and re-heated foodservice items) will not do anymore.

With the cooking channel promoting homemade gourmet foods, it is essential to create REAL signature dishes in order to stand above the crowd. Price is less of an issue if the food is outstanding, and homemade. I am a firm believer in 100% scratch foods, and it has
helped keep my store growing, as many people come in for the fresh made products.

If you’re going to commit to homemade, than get the right people, with the right recipes, and the results will be there for you.

Lee Kent
9 years 3 months ago

Yes, more people are headed back out to restaurants these days. What should grocery do? Rethink the consumer who is eating in and why. Families with small children? Senior adults? Etc. Then prepare your offerings for them.

W. Frank Dell II, CMC
9 years 3 months ago

No question home meal replacement has improved in quality, taste and appearance, but still is not as competitive as it could be.

I dare say much of current sales are made in the store during the “What’s for Dinner” shop, which occurs between 4:00 and 6:00 pm. And how many of the sales are rotisserie chickens?

To be competitive the supermarket needs to brand their offering and frequently change the menu. They need communicate with the consumer via advertising or email. Home delivery could be important, but requires sufficient volume to be cost effective. Depending on the target market the positioning could be Mama’s Kitchen, Dinner Deluxe, or Seafood Supreme, to be different than the high-volume ethnic take-home or delivery competition.

Shep Hyken
9 years 3 months ago

The word that comes to mind is “customization.” That’s a fancy word for giving the customer choices.

Prepared supermarket meals are “as is.” If you don’t like the vegetables offered with the meal, too bad. That’s the way it is. However some supermarkets and grocery stores have choices of prepared foods, versus fully prepared meals. That allows for “customization” where the customer gets to mix and match.

There is still a place for the prepared meal. The stores know what’s popular. And the customer has the choice of grabbing the prepared meal or spending a little more time making choices.

Shilpa Rao
9 years 3 months ago

As rightly pointed out by many, the food has to be appetizing and fresh at a great price. Food fatigue with the sameness in the menu is also one of the reason for the dip in sales. Also the good-for-you, healthy food category has not been explored more by retailers; currently limited mostly to salad choices.

As the economy improves, retailers need to up their game to provide solutions for hunger, health and palate.

Ralph Jacobson
9 years 3 months ago

I don’t feel the 42% to 38% drop is significantly outside the margin of error, and I wouldn’t be concerned on that alone. I do feel that the economy has strengthened since 2010 and as history has shown, more people want to treat themselves, regardless of how attractive retailers make the home meal solutions.

Personally, I’d go back to in-store or outside cafes to entice spending on these meals. Kill some dead floor space and put up some tables and chairs.


Take Our Instant Poll

Which feature should grocers particularly focus on to increase the appeal of their food prepared offerings?

View Results

Loading ... Loading ...