Retail prepared foods a $13 billion market
The solution has been to bring food spending back into the home after decades of doing the opposite by finding lower cost, delectable cuisine among the prepared and ready-to-eat foods available at local supermarkets, according to "Prepared Foods and Ready-to-Eat Foods at Retail: The New Competition to Foodservice" by market research publisher Packaged Facts, New York, N.Y.
The market study -- which includes data from Packaged Facts' February 2010 proprietary survey of 1,881 U.S. adult (18+) consumers -- reveals that about 50 percent of respondent restaurant goers say they are more likely to eat dinner at home compared to "three months ago." Further, 64 percent of adult consumers have purchased ready-to-eat/heat-and-eat food from a grocery store or supermarket in the last month.
"With the recession has come a migration of foot traffic and food sales from restaurants into the home, and in the short-term we believe economic trends favor grocery retailers as consumers seek less expensive meal alternatives," says Don Montuori, publisher of Packaged Facts. "Sustaining this momentum will require food retailers to continue their transition toward offering higher quality ready-to-eat products. Otherwise customers will leave as quickly as they arrived."
Packaged Facts forecasts supermarket/grocery prepared foods will achieve sales of $13 billion and $14 billion in 2010 and 2011 respectively, due to growth of 7 percent during both years. Aggressive prepared food initiatives and expansion from players ranging from Walmart to BJ's Whole Club to Kroger's Fresh Fare to Walgreen's are expected to further benefit the food retail landscape by giving consumers more locations and more choices.
Prepared foods are popular options for two divergent populations. The first are those that may seek low-cost, quick alternatives out of financial necessity, cooking aversion, and extreme convenience. The second is a demographic that can likely afford to spend more on prepared foods, and may choose them as quality alternatives to home cooking or using restaurants.
As products that allow for simple meal planning, prepared foods are also popular among older consumers age 55 and above, who the survey found are "more likely" to be influenced by the "shopping efficiency" of prepared foods. As a result, Packaged Facts forecasts that helping older consumers plan their purchases and making shopping trips less stressful through efforts by food retailers to place prepared foods in a central role will become increasingly important to this market.