The pandemic, of course, sent most cubicle-dwellers to their home offices. The fact that many of those people are still working from home most of the time is apparently very good news for grocery stores.
Food-at-home sales are outpacing restaurant sales, a trend that is expected to continue to grow, according to research released Tuesday by technology, analytics and data firms Information Resources, Inc. (IRI) and The NPD Group (NPD), which merged this month.
Food-at-home sales have grown 8.7% compared to a year ago, while food-away-from-home sales are up 6% compared to 2021, the groups said in their first-ever assessment of the nearly $1.5 trillion total food market.
Part of the reason for that growth is the way Americans are working today. Some 20 million U.S. workers have hybrid or flexible work schedules that allow them to do their jobs, at least some of the time, from home. That is keeping 62.5% of food dollars based on at-home sales, while 37.5% of food dollars are spent on restaurants and other foodservice, the report found.
Albertsons CEO Vivek Sankaran told analysts last month that his company has noted the shift from people working at home, with the grocer’s prepared meals, sandwiches and grab-and-go salads performing well.
“Consumers are still eating a lot at home, right?” Sankaran said. “Our ready meals are doing so well, we just launched a sandwich program. And the sandwich program, which is homemade sandwiches, they’re doing so well. And our convenient salads in our stores are doing so well.”
Another reason for the at-home focus? Inflation.
Consumers are seeking out less-expensive food options from grocery stores rather than dining out at restaurants, David Portalatin, SVP and industry advisor for food and foodservice for NPD, said in a statement. “Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home,” Portalatin said in a statement.
Grocery prices have soared more than 13% over a year ago, while restaurant prices are up 7.6% over 2021. But a typical restaurant meal costs 3.4 times more than one from the grocery store, the report said.
IRI and NPD used retail point-of-sale data combined with NPD tracking of eating behaviors for the research.
When shoppers hit the grocery store, they are increasingly hunting for low prices, the report said.
“Consumers are bargain hunting, preferring more mainstream and value brands over premium brands, choosing private-label foods in select categories and occasionally buying premium products as affordable luxuries,” the report noted.