Consumers have begun bargain hunting when grocery shopping, eating more meals at home, and cutting back on restaurant visits, according to data reported by Information Resources Inc. and The NPD Group; two companies that have recently merged to form a yet-to-be-named global technology, data, and analytics provider.
As a result of inflation hikes and other factors raising prices, the at- and away-from-home food market is forecast to grow by 8 percent this year. Broken down, the impact of inflation is less severe for food away-from-home, up 7.6 percent from last year, compared to food-at-home, up 13.1 percent from last year. Despite the disparity, restaurant and foodservice eating is still 3.4 times as expensive as food sourced from retail and eaten at home.
“Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home,” said David Portalatin, senior vice president and industry advisor for food and foodservice for The NPD Group, in a statement. “As we head into 2023, restaurant recovery will be slow and steady, as traffic begins to return to pre-pandemic levels. Current demand suggests that culinary trends are shifting to incorporate more bold flavors inspired by global and regional influences.”
The combined report also found the following:
• Hybrid and flexible work schedules are keeping roughly 62.5 percent of dollars spent on food for retail at-home use, with 37.5 percent reserved for foodservice
• Consumers are shopping for more mainstream and value brands over premium items
• Foodservice traffic decreased by 3 percent in July, signaling that consumers are migrating to at-home food to offset rising costs
• Shopping discrepancies between lower- and higher-income households intensifies as the former remains more severely economically impacted, as such, higher-income households are more likely to opt for premium products
“With inflation hitting 8.5 percent in July, it’s no surprise that consumers are trading down to lower-priced options and opting for more value, especially when dining out,” said Dr. Krishnakumar Davey, president of CPG and retail thought leadership for IRI and NPD, in a statement. “While the pandemic and recent inflationary pressures shifted demand, restaurants and foodservice outlets offering value, convenience, and at-home indulgence are top of mind for consumers and will continue to grow.”
Related: As Grocery Prices Swell, Restaurants Offer Value; IRI: Eggs, Frozen Dinners Most Impacted by Inflation