Quick Stats

Quick Stats

    You are here

    Good News for Grocers: At-home Meals Still Rule

    But still no rest for the weary

    By Meg Major, EnsembleIQ

    Although foodservice spending increased 3 percent during the 12-month measuring period ending April 2015, visits remained flat, according to new research by The NPD Group, which also found that in-home meals, which have been on the rise for several years, are in the lead.

    Indeed, four out of five meals are prepared and consumed at home, according to the latest insights from NPD, whose food consumption market research detected that rising food and operational costs were primarily responsible for the 3 percent foodservice gain in the last year. However, the increase did not equate to foodservice visits, which were flat in the comparable period, according to the global information company.

    Accordingly, NPD says the foodservice industry remains challenged to get people out of their homes to eat versus the prevailing preference to eat in home, which shows little signs of slowing down.

    The share of consumer dollars spent on food at home compared to food away from home has been close to 50/50 for several years, so says NPD researchers. The relationship between inflation for food at home and food away from home tends to provide a short-term benefit to one side of the food space or the other, and it is currently giving foodservice a very slight advantage, reports NPD.  In 2014, the average cost of a restaurant meal per person was $6.96; the estimated per person average cost for an in-home prepared meal was $2.31.

    In fact, the U.S. Census Bureau recently reported that foodservice spending exceeded grocery spending for the first time ever, but the research didn’t include spending at big box food retailers.

    In spite of lower gas prices during the past year (notwithstanding the past two months, when gas prices have been on the rise), foodservice visit growth remained stalled – traffic has been declining to flat for the past several years – during the comparable year-long April 2015 measuring period.

    Tellingly, annual per capita foodservice visits were pegged at 190 – three fewer visits per person per year from 2013. Young adults are typically the heaviest restaurant users, but since the Great Recession, Millennials have cut back dramatically on their visits to and spending at restaurants.  In particular, adults ages 25-34 who are more likely to have families cut back the most on restaurant visits, making 50 fewer visits per person per year over the past several years. Moreover, NPD’s food consumption research also found that Millennials ate eight more meals at home last year compared to the prior year.

    Additionally, the youngest adults ages 18-24 made 33 fewer visits per person per year in 2014 than they made in 2007. 

    While the news clearly bodes well for retail food outlets, Bonnie Riggs, NPD's restaurant industry analyst, believes, “It’s a battle for share within the foodservice industry, and a battle for food dollars between in-home and away-from-home dining.” In order to grow, Riggs says, "Foodservice manufacturers and operators need to have a clear understanding of consumer expectations," and figure out a way to meet them. "If they don’t, someone else will."

    And that someone is increasingly the supermarket sector, to which we also caution to keep its eyes laser-focused on store innovation and total meal solutions around the whole store.

    By Meg Major, EnsembleIQ
    • About Meg Major Veteran supermarket industry journalist Meg Major brings a wealth of experience to her role as Chief Content Editor of Progressive Grocer. In addition to her editorial duties, Major also spearheads the retail food industry’s premier women’s leadership recognition platform, Top Women in Grocery. Follow her on Twitter at @Meg_Major, connect with her on LinkedIn at www.linkedin.com/in/megmajor, or email her at [email protected]

    Related Content

    Related Content