To counter rising food costs, consumers are bargain hunting when grocery shopping, eating more meals at home and cutting back on restaurant visits, according to a new report published by IRI and the NPD Group. The nearly USD 1.5 trillion at-home and away-from-home food markets are forecast to grow by 8% in 2022, the recently merged data providers found. While inflation is more moderate for food away-from-home compared to food-at-home, the typical away-from-home eating occasion still costs 3.4 times more than in-home food sourced from retail, the report shows. At-home food (8.7% sales growth versus a year ago) is outpacing away-from-home food consumption (6% versus a year ago), according to IRI’s and NPD’s inaugural joint research.
Other key findings from the IRI-NPD research identify what is driving shifts, how occasions at home are evolving, and the impact of rising inflation, including:
- Hybrid and flexible work schedules
- Consumers are bargain hunting
- Consumers are migrating to more at-home food to offset rising costs, as noted by the deceleration in foodservice traffic, down 3% in July in the US
“With inflation hitting 8.5% in July, it’s no surprise that consumers are trading down to lower-priced options and opting for more value, especially when dining out,” said Dr. Krishnakumar (KK) Davey, president of CPG and Retail Thought Leadership for IRI and NPD.“ While the pandemic and recent inflationary pressures shifted demand, restaurants and foodservice outlets offering value, convenience and at-home indulgence are top of mind for consumers and will continue to grow.”
“Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home,” said David Portalatin, senior vice president and industry advisor for Food and Foodservice for The NPD Group.“As we head into 2023, restaurant recovery will be slow and steady, as traffic begins to return to pre-pandemic levels. Current demand suggests that culinary trends are shifting to incorporate more bold flavors inspired by global and regional influences.”
The IRI-NPD inaugural joint research merges IRI’s retail point-of-sale data on what consumers purchase and where they shop with NPD’s continuous following of at- and away-from-home eating behaviors.
IRI and NPD completed their merger in August 2022, creating a global technology, analytics and data provider. A unified name and brand for the combined company will be announced.
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