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    Consumers Trade Down from Restaurants to Grocery Store Prepared Meals

    The downturn in the economy is straining discretionary spending for families, forcing many to cut back on restaurant meals and substantially scale-back projected holiday shopping.

    The downturn in the economy is straining discretionary spending for families, forcing many to cut back on restaurant meals and substantially scale-back projected holiday shopping.

    In a recent Nielsen research report forecasting the upcoming holiday season, consumers reported that practical gifts will dominate shopping lists this year and food items and gift cards to grocery stores will be big sellers.

    "Retailers answering consumers call for value will capture shoppers' attention this holiday season," said Todd Hale, Nielsen's senior vice president of Consumer & Shopper Insights. Hale's remarks accompanied a recent Nielsen report predicting retail sales in the U.S. would achieve a 4.7 percent increase in dollars for the coming holiday season while unit sales will remain relatively flat, down 0.8 percent. Nielsen surveyed 21,000 households to measure the anticipated spending plans for the holiday season and found that 35 percent of those polled in all income levels expect to spend less and 6 percent expect to spend more. Half the survey respondents, a full 50 percent, expect to spend the same.

    "The trend to entertain at-home continues as consumers grapple with high gas and food prices, and it bodes well for manufacturers and retailers promoting at-home options," said Hale.

    Seattle-based foodservice consultant Dean Dirks of Dean Dirks & Associates, said supermarkets will benefit from more people eating at home, thus increasing their at-home food purchases to compensate for the meals they previously ate out at restaurants. The fast-feeders are already responding to the downturn with discount pricing like $5 sandwiches and family meals priced at $10.

    A new report from foodservice consultants Technomic found three out of five consumers (62 percent) report purchasing more supermarket prepared meals than a year ago, and are doing so at the expense of fast-food restaurants. Technomic's Retailer Meal Solutions Consumer Trend Report found that 55 percent of consumers surveyed think that retailer prepared foods have greatly improved over the past three years; more than 80 percent of those surveyed reported buying at least one prepared meal from a retailer in a typical month with 41 percent purchasing four or more retailer meals per month. The most important considerations in purchasing these meals: Taste and freshness, at 89 percent and 87 percent, respectively.

    "Retail food chains, eager to recapture share-of-stomach, have been actively developing retailer meal solutions with strong consumer appeal, allowing retailers to reposition themselves as competitors to restaurants," said Darren Tristano, executive vice president, Technomic

    At a recent roundtable discussion organized by Progressive Grocer, Nancy Gaddy, vice president of deli and bakery for Jacksonville, FL-based Winn-Dixie Stores, Inc., said the retailer is trying to provide meals consumers would prepare at home if they had the time.

    Wooster, OH-based Buehler's is has a multi-pronged approach to meal replacement. Eleven of the grocer's 13 units have full-service restaurants, which have recorded sales exceeding those of the company's deli. "If the customer is looking for something special, we have the ability to go back and get the corporate chef to make a recipe," said Mike Merritt, deli merchandiser. "We have chefs on location at every store, which helps us stay very close to our customers."

    Merritt noted that the grocer's "Smart-to-Eat" program ties into the deli and convenient dinner-for-two meals program. In addition, Buehler's nutritionist has set up a vegetarian-based diet for the restaurant, which also is being tied into the deli, taking advantage of a current trend.

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