Battle for “Stomach Share” Continues

November 26, 2014
NACS Online
New survey shows diners increasing visits and purchasing more ready-to-eat meals from c-stores, dining out less.
​NEW YORK – With only a little over a month remaining in 2014, profit-margin pressures remain on the front burner for restaurants, which are experiencing a tougher cost landscape this year, according to a new study from AlixPartners, the global business advisory firm.
The AlixPartners North American Restaurant & Foodservice Review, released this week, examined the financial performance and fiscal health of more than 85 restaurants and foodservice companies representing approximately $225 billion in annual revenues. The comprehensive study also included a survey of more than 1,000 consumers gauging their anticipated dining behavior and the drivers of dining choice across the core restaurant segments – Fast Food, Fast Casual, Casual, Fine Dining and Convenience Stores.
According to sources with Alix, one of the clearest takeaways for convenience store industry is the increased visits by consumers to convenience stores to purchase ready-to-eat-meals. As convenience stores continue to transformation and invest in higher quality and better tasting ready-to-eat options, consumers are responding. Of diners surveyed, 20% said they’ll purchase ready-to-eat meals (often from grocery stores or convenience stores) in order to cut their restaurant spending over the next 12 months (up from 14% from Q1 2013). Further, consumers increased purchases from convenience stores to 3.2 times per month, up from 2 visits per month in Q1 2012.
“Grocery and convenience stores are upping their ready-to-eat game by offering higher quality and better tasting ready-to-eat options, and we’re seeing the results as value-conscious consumers are increasingly seeing ready-to-eat meals as a preferable option as they seek to reduce their dining out spend,” said Eric Dzwonczyk, managing director at AlixPartners and co-lead of the firm’s Restaurant and Foodservice Practice. “Traditional restaurants can no longer afford to ignore or underestimate the ready-to-eat, convenience and grocery store threats. We’ve seen a blurring of the lines between these segments and traditional restaurants, particularly Fast Food, over the past several years and we expect this to continue if traditional restaurants do not take note and find ways to win back this ‘share of stomach’.”