Study: Prepared foods heats up competition with restaurant industry

The restaurant business in the U.S. is heating up.

But it’s not other restaurants that are making this industry more competitive — it’s the prepared food market.

Rosemont, Ill.-based The NPD Group Inc. recently released a study on the growing popularity of prepared foods — the meals that consumers purchase at supermarkets, drug stores and other retail outlets.

NPD if forecasting that the consumer traffic for prepared foods will grow by 10 percent over the next decade. By comparison, traffic for restaurants is expected to grow by four percent.

The message here: Restaurants need to be touting the benefits of dining out versus dining at home — loudly and often.

“Capturing visits from direct competition, like prepared foods retailers, has been the primary source for a restaurant operator’s growth over the past 10 years and this will continue to be the case,” says Bonnie Riggs, NPD restaurant industry analyst. “Efforts to pull consumers out of their homes and back into restaurants will require touting the benefits of eating out versus staying at home and cooking or eating meals offered by home-meal replacement retailers.”

The NPD study also highlights some facts about the prepared-food market, for example:

? Younger adults are more likely to buy pizza, hot dogs and burgers to eat at home.

? The consumer age 18 to 24 is more inclined to frequent prepared-food retailers — not so much for meals, but to satisfy their craving for an afternoon or evening snack.

? The most frequently purchased items include chicken, pizza and macaroni and cheese.