Healthcare concerns redirect more QSR consumers to grocery stores, research suggests

Source: iStock

Healthcare concerns likely are behind the steep drop in Americans’ spending at restaurants in 2016 and the uptick in consumers who say they will cook at home more in the New Year, according to recent research. 

In mid-2016, Americans began drastically cutting back on casual dining at lunch with NPD reporting a 4% drop in lunch visits to restaurants in the second quarter of 2016 compared to the prior year. A closer look revealed a 6% drop in casual dining and a 9% drop in fast casual, the research group found.

This trend continued with the consumer research group CivicScience finding about a third of Americans spending somewhat or much less at fast food restaurants in the six months ending Sept. 15.

In a blog post published in September, the research company confirmed that QSRs were particularly hard hit by Americans’ cutbacks with the number of people who reduced spending at QSRs being three times greater than those who were spending more.

After extensive analysis, CivicScience determined that a major cause of the decreased spending was the perception of worsening personal finances in recent months which closely correlated with an increase in health insurance costs over the past year.

Specifically, it found 47% of regular QSR diners whose insurance increased reported cutting back QSR spending “somewhat” or “much less.”

Those whose insurance costs rose the most were 30% more likely to say they were cutting back spending significantly, the research company found.

The bad news for QSRs – and the potential good news for grocers – is overall health insurance costs are expected to rise in 2017 and Affordable Care Act enrollees are expected to see a “huge” premium, CivicScience says.

“As long as consumers are forced to spend more on healthcare, they will look for cheaper food options at the grocery store or elsewhere,” the research company adds.

More consumers resolve to cook at home in 2017

More recently published research commissioned by the online grocer Peapod and conducted by ORC International reinforces the duel factors of

health and cost-savings as motivators for more people to eat at home in 2017.

It found 34% of Americans surveyed in mid-September said they play to cook dinners at home more in the New Year. Of these, Millennials are twice as likely than Boomers to make the change, according to the research published Dec. 29.

Nearly two-thirds of Millennials surveyed said they wanted to cook dinner at home because it cost less money than eating out and 43% said it was because cooking at home is healthier, according to Peapod.

Peapod also found that about half of Americans surveyed said they wanted to meal plan more in 2017 in large part to save money, eat healthy and waste less food.

Provide inspiration to drive sales

So, how can retailers and manufacturers cash in on the shift?

One strategy is to provide inspiring recipes that are fast and convenient, Peapod suggest. For support, it points to a 120% increase in traffic to its recipe inspiration website, FromthePod.com, in 2016 over the prior year.

It also notes survey results revealed 51% of Americans said they would prepare dinner at home more often if they had new ideas.

Given that 63% of Millennials report wanting easy, quick recipes, manufacturers should consider promoting recipes with short lists of common ingredients. And with 74% of Boomers saying nutrition is important, recipes also should be healthy, the survey data suggests.

"Peapod has found that consumers are not just looking for delicious recipes, but also recipes that are convenient and easy to make on a busy weeknight. For example, some of the most popular recipes on FromthePod.com are slow cooker recipes, such as the Slow Cooker Tex Mex Chicken Stew, that require minimal prep and can cook while you’re at work. Another popular recipe is the Easiest One-Pot Pasta and Broccoli, which has just five ingredients and comes together in about 15 minutes, from Peapod’s partnership with blogger and cookbook author Gina Homolka of Skinnytaste," Anthony Stallone, Peapod’s VP of Merchandising, told FoodNavigator-USA.

Manufacturers and retailers that reduce prep work for consumers – such as blending spices, marinating protein or chopping produce – also will be rewarded, the Peapod survey suggests. It also found those who provide stovetop solutions verses oven or microwave options also will fare better among consumers. 

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