Retailers' Foodservice Growth Outpacing other Channels: Survey

PORT WASHINGTON, N.Y. - Retail foodservice operations in supermarkets, convenience stores, discount stores, and price clubs have posted stronger foodservice traffic growth over the past two years than any other segment of the restaurant industry, according to market research firm NPD Group based here.

The surging growth of retail foodservice operations amounts to roughly eight billion meals and snacks for the year ending May 2007, said NPD, which found purchases of prepared meals are up 5 percent at retail stores during that time, compared with 3 percent traffic growth at restaurants.

According to the NPD survey, shoppers bought prepared meals at supermarkets and convenience stores because they "always go there;" they "like going there;" and because it's convenient.

The data are based on a sample of more than 400,000 consumers who visited restaurants and nearly 77,300 consumers who visited retailers.

Among retailers, c-stores captured 54 percent of all foodservice traffic, while supermarkets had a 32 percent share. Mass discounters like Wal-Mart and Target Corp. and warehouse clubs are showing the strongest rate of foodservice growth, the survey indicated.

Restaurants saw growth in the quick service and casual dining segments, but declines in mid-scale family-style restaurants such as Denny's and Friendly's, whose traffic dipped 3 percent over the two-year period, according to NPD.

The average check at all restaurants was $6.19, or more than double the average check of $2.99 at convenience stores. Retail stores posted an average check of $3.12.

"The growth of the restaurant industry during the past 25 years -- and especially the growth of takeout meals -- has shown everybody in the food market that consumers now want 'packaged meals,'" said Harry Balzer, v.p., NPD Group.
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