Grocerants help supermarkets maintain market share when competing with restaurants

23-Dec-2014 - Last updated on 23-Dec-2014 at 13:48 GMT

The rise of grocerants, or in-grocery-store dining, is helping supermarkets – and by extension food-based consumer packaged goods – hold their own against restaurants, drive-thrus, food trucks and take-out joints as consumer spending on food at home loses market share, according to recently released research.

“The last 30 years have seen consumer spending on food at home lose share,” falling from 57.2% of total food expenditures in 1982 to 52.1% in 2013, according to a report from Acosta Sales and Marketing and the research and consulting firm Technomic. At the same time, spending on food service has climbed from 42.4% of the market share in 1982 to 47.9% in 2013, according to the report released Dec. 8.

One reason for the shift is that “consumers have more meal options than ever before,” so the decision about what is for dinner is no longer restricted by what is stocked in the pantry, according to the report.

In addition, “dining out, including everything from restaurant dining to fully prepared meals from the grocery store, has challenged the value equation and convenience of home cooking to the point that cooking at home is no longer the defacto answer to the question of what’s for dinner,” the report adds.

Indeed, consumers placing more value on time-saving and convenience are top reasons that they give for going out to eat instead of preparing food at home. According to Acosta, 42% of people say they go out to eat because they are too tired to cook, 33% say because they do not have time to cook and 31% say they go out when they are hungry.

Social pressure is another reason consumers are eating out more, according to the study, which found 41% of people went out to eat because their family asked to go, 41% went out for special events and 27% went because friends asked them to go.

Increased interest in eating out has helped total restaurant sales more than double in the last 20 years, reaching $450 billion in 2014, according to Technomic.

Supermarkets go head to head with restaurants

But supermarkets are not being left behind. Rather, sales of prepared foods, which includes in-store and take-out dining are up 30% since 2008, compared to 10% growth for the food service industry during this period, Chicago-based Technomic notes in the report.

This increase partly is due to the addition of in-store dining at many supermarkets, or grocerants, according to the report.

The survey of 1,500 U.S. consumers conducted in July 2014 revealed more than half of diners reported eating prepared foods in the grocery store dining area and 45% have eaten in convenience store dining space in the last year.

Even more have taken home prepared foods from a grocery store (73%) or convenience store (45%), the research revealed.

The reasons for eating prepared foods from grocery stores are similar to those for eating out with convenience at the top. But shoppers also opted for prepared foods from grocery stores for their value.

The No. 1 reason consumers brought home prepared food from the grocery store was because they didn’t want to cook (45%). Slightly fewer, 44%, said they did so because they were already in the store and it was convenient and about a third said they did so because it was cheaper than eating out.

Consumers also bought prepared food from grocery stores as a splurge. Almost 40% of people said they brought home prepared food from the stores so they could “‘dine-out’ at home.” A quarter said they bought prepared foods because it was “something different that I don’t usually prepare,” and 6% said they did so when they wanted something special for a guest or party, according to the report.

Grocery stores still in the lead

After taking into account purchasing prepared meals at the store, supermarkets captured more of consumers’ money than restaurants.

More than three-quarters of consumers surveyed by Acosta said they spend more on groceries than on eating out, and only 20% said the inverse.

This leaves the door open for CPG firms to market to time-crunched shoppers, according to the report. It notes many CPG firms already have “responded with meal solution products or offerings that require some simple home preparation all promoting the opportunity to eat out while eating in.”

For example, salad kits with all the ingredients wrapped separately for freshness offer consumers a chance to make gourmet salads at home with ease.