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Supermarkets sweep up at expense of local restaurants and takeaways

Supermarkets sweep up at expense of local restaurants and takeaways

With supermarket chains opening more convenience or c-stores, research from global information company The NPD Group Inc highlights the threat of this expansion to restaurants and takeaway operators.

In 2012, supermarkets enjoyed almost 46 million more out-of-home eating visits than they did three years ago. The primary motivation for these visits was “Didn’t want to cook/Nothing at home”, accounting for an additional 28 million more visits to a supermarket in 2012 compared with 2009.  

Guy Fielding, Director of Business Development for The NPD Group, explains: “Previously more traditional restaurants would typically benefit from people not wanting to cook or having nothing in, but more and more consumers are answering this need with a trip to a supermarket; in many cases choosing the smaller local c-stores with their extensive prepared ready-to-eat meals and snacks.” Supermarket visits were up across all out-of-home eating occasions last year – a number of which can be seen as a threat to local competing restaurants and takeaway operators:

  • Deal/promotion occasions, accounting for 64.2 million more supermarket visits in 2012
  • Snacking occasions, accounting for 27 million more visits in 2012
  • Breakfast occasions, accounting for 15.6 million more visits in 2012
  • Dinner occasions, accounting for 3.8 million more visits in 2012.

Fielding continues: “As supermarkets continue to expand in numbers, neighbouring foodservice businesses should expect direct competition from these operators, especially as their product mix and deal/promotion strategies are refined and adapted to the local trade. We expect to see more ready-to-eat hot offerings, variations on portion sizes, more drink and snacking options, and a heavier focus on breakfast, an area that is enjoying rapid market growth.

“However, all is not lost; there are still opportunities for restaurants and takeaway operators to focus on their lunch offerings, and in particular, to consider offering inside and outside seating. At the moment, the lunch eating occasion is being left behind by growth in breakfast, dinner and snacking. As most supermarkets lack on-premises seating facilities, foodservice operators have a great opportunity to capitalise on on-premises seating, a factor that continues to be an advantage for most high street operators. However, foodservice operators ignore other factors at their peril – consumers are more than happy to take-away if the ambiance and atmosphere don’t meet their expectations.”

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