Supermarkets winning fast-food battle

Posted by Daniel Palmer on 8th October 2008

More and more American consumers are now turning toward the supermarket aisles for quick dinner options at the expense of fast-food restaurants.

Three out of five consumers (62 per cent) who report purchasing more supermarket prepared meals than a year ago, are doing so instead of purchasing from fast-food restaurants, according to a new report from American foodservice consultants Technomic. The survey of more than 1,500 American consumers found that family-style and casual-dining restaurants were also impacted to some extent. Convenience was cited by 86 per cent as the reason for buying more retailer meal solutions.

“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,” noted Darren Tristano, Executive Vice President of Technomic. “Consumers are facing increasingly difficult economic choices, like balancing the higher cost of gasoline with the decision to dine out. The economic downturn may alter consumers’ food sourcing habits. To stay in the game, retailers and restaurant operators will have to continue to adapt their value equations to meet the market’s changing needs.”

The findings come from Technomic’s Retailer Meal Solutions Consumer Trend Report, which provides an in-depth analysis of consumers’ purchases of retailer meal solutions (RMS), their motivations and unmet needs, as well as why they chose RMS over restaurant meals.

The research discovered that over half (55 per cent) of consumers surveyed believe that prepared foods offered at food retail outlets have greatly improved over the past three years, which has led to an increase in the number of purchases. Over 80 per cent reported buying at least one prepared meal from a supermarket in a typical month, with 41 per cent now purchasing four or more supermarket meals per month. One-fifth also stated that they would buy more prepared meals if the range at supermarkets and, in particular, convenience stores, was enhanced to offer more variety.

Taste and ‘freshness of food’ were listed as the most important factors in choosing to purchase a retailer-prepared meal, cited by 89 per cent and 87 per cent respectively. However, offering fresher menu items was an area noted as needing improvement for many supermarket establishments.

A number of types of food retailers were found to be implementing improved strategies regarding prepared meal options, including traditional supermarkets, mass merchandisers, warehouse clubs, convenience stores, specialty food stores and upscale/fresh-format supermarkets.