Retail Stores Cut Into Restaurant Lunch Sales: NPD Report

Restaurants compete most heavily with retail stores for prepared food orders at supper and snack, but the strongest visit growth for retail prepared foods has been at lunch, reports The NPD Group global information company.  Visits to retail stores for prepared foods at lunch increased by double-digits since 2008 and restaurant lunch visits have declined, according to a new NPD foodservice market research report, The Retail Prepared Foods Market: Assessing the Competition.

The competitive advantage that retail stores, like 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, based on the NPD report’s findings. These attributes are key drivers for the 29 percent visit growth for retail prepared foods at lunch, reports NPD.  High unemployment and shaky consumer confidence are among the reasons that lunch visits to restaurants have declined by one percent since 2008.

The growth in the retail prepared foods market is part of the broader trend on the part of Americans to consume more meals in home.  A recent NPD forecast through 2022 finds that the instances of prepared food purchased at retailers for at-home consumption will increase by ten percent over the next decade compared to a four percent increase forecast for restaurant traffic. The component of the retail prepared food market that is supporting growth is the portion that is purchased and eaten at home or at work for lunch and supper.

“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,” says 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.“