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Millennials driving sales of grocery prepared foods

Grocery foodservice and its appeal among Millennial consumers is giving restaurants a run for their money

A recently released report from market researchers NPD Group confirms the notion that restaurants’ competition for Millennials’ dollars stretches beyond other restaurants to grocery stores. “Supermarkets are raising the bar on their foodservice offerings and by doing so are attracting the attention of the coveted Millennials,” states the report, titled “A Generational Study: The Evolution of Eating.” 

In-store grocery dining and prepared food takeout accounted for 2.4 billion  foodservice visits in 2015, according to NPD Group research.
In-store grocery dining and prepared food takeout accounted for 2.4 billion foodservice visits in 2015, according to NPD Group research.

“Restaurant-quality and fresh food, chef-driven menus, in-store experiences have given rise to the Grocerant and inspiration to Millennials to visit and spend,” NPD explains.  

“Millennials’ interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years,” says David Portalatin, VP of industry analysis at NPD Group. “Give the Millennials what they want — fresh, healthier fare and a decent price — and they will come.” 

In-store dining and takeout of prepared foods from grocers has grown nearly 30% since 2008, accounting for 2.4 billion foodservice visits and $10 billion in consumer spending in 2015, according to NPD’s research.

Furthermore, more than 40% of the U.S. population purchases prepared foods from grocery stores and, while Millennials use grocery stores less than other generational groups, retail foodservice appears to be gaining traction with them.

“Many grocers now offer restaurant-quality food at a lower cost than full service or some fast casual restaurants, and specialty categories like Asian, seafood, Italian, Mexican, and barbeque. Grocery stores are aiming to cater to all dining needs, including hot, custom-prepared grilled meat, food bars, soups, and sushi,” notes NPD.

What advantages, if any, do grocers have over restaurants when it comes to foodservice? Perceived healthfulness, for one. “Consumers rate visits to grocerants higher than traditional quick service restaurants (QSRs) on variety and healthy options,” NPD points out, adding that these two attributes are among the most important when it comes to motivating customers to purchase prepared foods and when it comes to their satisfaction with these purchases. Grocery prepared foods are also rated higher in the areas of “freshness” and “quality”— areas of particular importance to Millennials.

Beyond the food itself, Millennial-savvy grocers are understanding the importance of the “experience” to the young adult cohort. More retailers are allocating space for “comfortable, casual seating for in-store dining and some a full-service restaurant,” notes NPD.

This article originally appeared in Restaurant Hospitality, an SN sister publication. 

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