NPD: C-Stores Sell 7 Percent of Ready-to-Eat Foods

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NPD: C-Stores Sell 7 Percent of Ready-to-Eat Foods

CHICAGO -- Seven percent of the roughly 62 billion commercial foodservice meals and snacks consumed annually are purchased at convenience stores, with retail stores—food, drug, discount, department and price clubs—representing an additional 6 percent, according to a new report from the NPD Group, based here.

Retail foodservice represents spending of close to $13 billion, according to NPD’s recently released "Retail Meal Solutions" report. Retail ready-to-eat meal and snack purchases increased 2 percent for the year ending August 2008. The quick-service restaurant (QSR) segment, with which retail stores directly compete in providing convenience meal solutions, saw sales grow by only 1 percent. The full-service restaurant segment realized a downturn.

"Consumers’ increasing use of foodservice for ready-made meals has long been recognized by grocery retailers as an opportunity," Bonnie Riggs, NPD restaurant industry analyst and author of the report, said in a statement. "For some time, retail stores have offered prepared foods in the deli department, but have now expanded foodservice offerings to include a variety of cold and hot ready-to-consume meals and snacks."

The report dispels the popularly held belief that supper is the prime daypart for retail meal and snack solutions. NPD found supper accounted for only 17 percent of retail meal solutions consumed, though it is a steadily growing daypart for retailers. It is a weakening daypart for QSRs. Evening snacks represent the largest share, 35 percent, of ready-to-eat food consumed, followed by lunch with a 27 percent share, and the morning meal, with a 21 percent share.

"Retail outlets are more dependent on morning meals and p.m. snack purchases than QSRs," said Riggs. "These are the on-the-go needs that are being met by retailers—consumers making those purchases on the way to work, to eat at work, or in their car; purchases that otherwise would have been made at a QSR."

Consumer motivation in purchasing prepared meals and snacks from retail stores include convenience, availability of healthier options, variety and affordability, according to the report. Riggs said these are the attributes consumers found lacking at QSRs.

"As always, it’s a matter of learning and understanding consumers’ needs when it comes to meal and snack solutions," she said. "With this learning and understanding, there is opportunity here for retailers, foodservice manufacturers and restaurant operators."