Restaurants Losing Traffic To Retailers At Key Lunch And Dinner Dayparts

The NPD Group has issued a new research report that details how prepared food offerings at retail outlets such as supermarkets are eating into restaurants’ lunch and dinner traffic. The report, “The Retail Prepared Foods Market: Assessing the Competition,” says visits for prepared foods at retail outlets at lunch have soared 29% since 2008, while overall lunch traffic at restaurants declined 1% during the five- year period. Lunch visits now account for 20% of all retail outlet foodservice visits, NPD says.

The research shows that prepared foods at retailers are appealing to consumers, especially versus quick-service restaurants, because of the availability of healthy options, variety of foods, light meal offerings, affordability and one-stop shopping convenience. NPD says high unemployment also has contributed to the decline in lunch traffic at restaurants.

The NPD traffic data shows that snack and dinner retail foodservice-type traffic occasions still dominate retail’s traffic distribution, with 35% of traffic in each daypart; 10% of occasions are for the morning meal period. In addition to the 29% gain in visits for lunch since ’08, supper occasions have risen 9% and breakfast visits 2%. It’s a much smaller gain in morning visits than restaurants have experienced during the five-year period. Only retail snack occasions have fallen, down 6%.

NPD previously forecast that overall retail prepared foods visits will rise 10% between now and 2022, while restaurant traffic will grow only 4% during the period.

“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 consumer needs for prepared foods,” said NPD Restaurant Analyst Bonnie Riggs.

More information on the retail prepared foods research report and other NPD research is available at npd.com.”””