More Americans are turning down restaurants in favor of their own kitchens
- There's widespread belief that consumers are eating out at restaurants more and eating at home less, but in fact the opposite is true, according to The NPD Group's David Portalatin. He writes that while foodservice spending was up 2% for the year ending May 2018, visits were flat. Meanwhile, the number of consumers preparing and eating food at home increased.
- According to Portalatin, the growing cost of restaurant meals, the rise of grocery e-commerce and the popularity of streaming entertainment have all contributed to more Americans staying at home to eat and prepare meals. NPD found that the number of consumers making meals at home has grown over the past decade, with four out of five meals now prepared in U.S. kitchens.
- But consumers still want convenience, and aren’t willing to spend hours shopping and preparing home-cooked meals. Nearly half of dinners purchased from a restaurant are eaten at home and many in-home meals are a blend of freshly prepared dishes and foods purchased ready-to-eat. NPD predicts blended meals, which could include a mix of restaurant dishes, ready-to-go foods purchased at grocery stores and foods prepared at home, will grow in the next five years.
Millennials, the largest consumer body in the U.S., eat out more than the rest of us, but surveys indicate even they are slowing down. Michelle Meyer, head of U.S. economics at Bank of America Merrill Lynch, suggested to CNBC the slowdown by millennials could be because they are getting older and are spending money on things like housing, having families and home-cooked meals. The fact that grocery store sales also seem stagnant could be because consumers are buying more food online, and numbers aren’t showing up yet in data sets, Meyer said.
Millennial behavior follows an overall trend. A third of U.S. adults are eating out less frequently than three months ago, mostly because of cost, according to a Reuters/Ipsos survey. Yearly traffic to U.S. restaurants has been flat or up just 1% since 2009, when there was a 2% drop in the wake of the 2007 financial crisis, according to data from The NPD Group, and two out of three consumers said cost is the reason they don’t go out to eat anymore.
To fill that gap, grocery stores smartly are offering more and better prepared foods. In-store restaurants and bars have become more commonplace, with grocers like Whole Foods and Hy-Vee featuring table-service meals and craft beers on tap. And they’re increasingly bringing meal kits onto their shelves as the subscription industry struggles but consumers' desire for convenience and freshness continues to grow. According to a survey conducted last year by technology firm Fluent LLC, 24% of millennials said they subscribe to a meal kit service, the highest percentage among any demographic.
Of course, meal kits aren’t the only way grocers can offer personalized prepared options. At Kroger-owned Mariano’s, for example, shoppers can select their fresh cut of meat, season it with spices from the fresh spice department, and have it grilled to their specifications in-store.
Restaurants, on the other hand, are offering discounts or specially-priced meals, such as McDonald’s Dollar Menu, to bring in customers. Uber Eats and other delivery services also are becoming increasingly popular as restaurants seek to find their place in the eat-at-home trend.
Millennials are 75 million strong in the U.S., and they have specific dining preferences. They increasingly want to eat at home, but they also want convenience, flavor and good nutrition at a reasonable cost. Restaurants, food companies and grocery stores that find ways to meet those needs are likely to come out ahead.