From Our Print Edition

Most Americans love their fast food, but a growing number, including yours truly, are having a hard time swallowing the high prices that come with their order of a burger, fries, and a drink.

New research from LendingTree of 2,000 Americans finds that 65% “experienced sticker shock” to one degree or another after purchasing fast food in the past six months.

62% HAVE CUT BACK VISITS

Three out of four say they are still stopping to make a fast-food purchase at least once a week, but 62% have reduced their visits due to rising prices. As a result, nearly 80% say that they now see stopping at a drive-thru as a luxury purchase. Chick-fil-A (25%), Starbucks (22%) and Chipotle (21%) are seen as the priciest fast feeders.

The good news for grocers is that 56% of those surveyed say that they are making more meals at home in light of high fast-food prices, which points to an opportunity for supermarkets to offer alternative frozen and refrigerated options that represent a value compared to the price-inflated breakfast, burger, and chicken sandwiches being served up by fast-food chains.

Fortunately, grocers don’t have a lot of convincing to do. Three in four already believe food made at home is cheaper than the fast-food alternative.

The latest annual survey for FMI—The Food Industry Association — confirms that Americans are, indeed, making food more frequently at home. However, they are spending considerably less time doing so than in the past. In fact, nearly a third (32%) spend 30 minutes or less preparing dinner, up from 18% in 2020. Of course, frozen foods and refrigerated products prepared using air fryers, microwaves, and traditional ovens are perfect for speedy meal prep, but it’s important for retailers to call that out.

Another key FMI finding: more than half of all shoppers have positive feelings about grocery shopping, which means convincing them to buy fast-food alternatives and quick, easy meal solutions shouldn’t be difficult. Supermarkets remain the primary destination for groceries (preferred by 40% of shoppers), followed by mass merchandisers (32%).

New research from the Specialty Food Association (SFA) points to yet another opportunity. According to the association, specialty food sales grew from $88 billion in 2013 to $207 billion in 2023, a 149% increase. But shoppers often can’t find those items at their regular supermarket. Forty-four percent said that they make trips to secondary food stores to buy items they cannot purchase at their primary grocery destination, representing $1,200 in annual sales per household. Moreover, 41% said they would “be less likely to make shopping trips elsewhere” if their main grocery store carried a wider selection of specialty items.

If that’s not enough incentive for grocers, specialty foods typically deliver gross margins that are three to four times higher than mainstream items and represent a return on inventory investment of 50.1% compared with 19.8% for non-specialty items.

SEIZE THE DAY

Consumer surveys represent people’s attitudes on a subject in a snippet of time. Attitudes change and the competition doesn’t stand still. Grocers need to act. That means touting great-tasting alternatives to pricey fast foods, adding higher profit restaurant-quality and specialty foods and playing up speedy meal prep options in their frozen and refrigerated sets.