Retailers’ Prepared Foods Post Growth for Lunch Occasions

Retail stores’ prepared food orders see the heaviest competition from restaurants during supper and snack occasions, yet retailers maintain a stronghold on the lunch occasion, according to The NPD Group.

Visits to retail stores for prepared foods at lunch increased by double-digits (29 percent) since 2008, and restaurant lunch visits have declined, so finds NPD’s foodservice market research report, “The Retail Prepared Foods Market: Assessing the Competition.”

The competitive advantage that supermarkets have over restaurants, particularly quick service restaurants (QSRs), is the availability of healthy options, good variety of foods, light meal offerings, affordability and one-stop shopping convenience. High unemployment and shaky consumer confidence are among the reasons that lunch visits to restaurants have declined by 1 percent since 2008.

“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."

The growth in the retail prepared foods market is part of the broader trend on the part of Americans to consume more meals at 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 over the next decade compared to a 4 percent increase forecast for restaurant traffic.