Meals, Menus, and The Cost of Eating in America

 

Grocery Stores: More Than Just Sticker Shock

Food Fact: The grocery food index rose 0.3% in June — mirroring May’s increase — with notable price hikes in essentials like coffee, beef, and fresh produce.

Grocery stores have long been pillars of American food culture, evolving from mom-and-pop markets to supermarket giants and digital-first fulfillment hubs. But while food-at-home inflation trails restaurant inflation, the pressure is mounting. According to NIQ (formerly NielsenIQ), unit sales in U.S. grocery stores have declined by over 2% year-over-year, even as dollar sales inch upward — a clear sign of shrinkflation, smaller basket sizes, and hyper-strategic buying.

How Consumers Are Cutting Back

·       Downshifting Brands: Private labels are no longer seen as compromises. In fact, 85% of shoppers now consider store brands to be equal or better in quality than national brands, according to FMI. Store brand sales surged by $9 billion in 2024, reaching a record $271 billion, driven by innovation in categories like plant-based meals, global flavors, and clean-label snacks.

·       Fewer Trips: Weekly runs are evolving into biweekly hauls. According to Inmar Intelligence, trip frequency declined by 7% in the past year, while consumers increasingly rely on apps and digital circulars to pre-plan meals around loyalty perks, digital coupons, and BOGO events.

·       Reduced Basket Size: "Just-in-time" shopping is in. With more Americans preparing two to three mini-meals per day, the demand for fresh, portioned, and snackable goods is surging. Small-format produce (like mini avocados and snackable cucumbers), single-serve protein portions, and ready-to-use kits are leading sales growth.

 

Restaurants: Menu Prices Climb, Diners Step Back

Food Fact: Restaurant prices have increased for 27 straight months. In June, full-service menu prices jumped 0.5%, while limited-service edged up 0.2% — outpacing grocery inflation yet again.

Even as foot traffic stabilizes, consumer behavior is shifting. The National Restaurant Association reports that 58% of adults are eating at restaurants less often than they did a year ago, with middle-income households pulling back the most. Geographic disparities are also growing: full-service menu prices in the South and West are up over 4% year-over-year, compared to 2.8% in the Northeast.

How Diners Are Saving

·       Trading Down: Quick-service and fast-casual chains — particularly those with digital value menus and family bundle promotions — are gaining traction. McDonald's $5 Meal Deal and Chipotle’s loyalty boosts are prime examples of how brands are recalibrating to meet price sensitivity.

·       Skipping Sides & Extras: High-margin items like beverages, apps, and desserts are on the chopping block. Toast data shows that 45% of diners now order fewer extras compared to 2023, prompting restaurants to redesign menus with modular pricing and more value combos.

·       Dining Out Less Often: Dining is reverting to its pre-2010 pattern — a "treat behavior" rather than a regular habit. Restaurants are investing in experience enhancers: live music, chef-curated menus, and loyalty events to keep the emotional pull strong.

 

Convenience Stores: Quick Stops, Slower Sales

Food Fact: In 2024, convenience stores — typically resilient during inflation — are feeling the squeeze. Foot traffic is down, and the average basket size has decreased by 6.2%, according to NACS.

Long seen as the go-to for impulse snacks and emergency fuel, convenience stores are struggling to retain their edge. Even loyal C-store shoppers are replacing hot grab-and-go items with value-packaged snacks and protein bars purchased in bulk at grocery clubs.

How C-store Habits Are Changing

·       Reducing Grab-and-Go Purchases: Prepared foods are losing steam. Sales of roller-grill items like taquitos and hot dogs are down 8%, while shelf-stable snacks like jerky and trail mix hold steady.

·       Fuel-Only Visits: With gas prices rising, one in four C-store customers are no longer entering the store after fueling — a sharp increase from the 17% recorded just two years ago.

·       Seeking Promotions: Loyalty programs and digital deals now drive more than 30% of in-store purchases, up from 18% in 2021. Successful chains like Casey’s and Wawa are investing heavily in app-based rewards to retain high-frequency customers.

 

What Comes Next: Grocerants and Smaller Meals

According to Steven Johnson, the Grocerant Guru® at Foodservice Solutions®, hybrid foodservice — grocerants — are set to redefine convenience and value. These in-store kitchens serve restaurant-quality meals without delivery fees or tips, perfectly aligned with inflation-conscious households.

Grocerants now account for $43 billion in annual revenue, with growth driven by health-conscious grab-and-go meals, customizable hot bars, and global flavors like Korean BBQ bowls and Mediterranean mezze kits.

“Consumers are building meals around snacks, bundling components, and seeking flexibility,” Johnson says. This unlocks opportunity for:

·       Meal Deals in Grocery Stores: Mix-and-match bundles (entrée, side, drink) that rival fast-food combos in both price and prep time.

·       Snackable Restaurant Offerings: Shareable, snack-size portions — like sliders, bao, and flatbreads — that feel indulgent but don’t stretch the wallet.

·       Cross-Channel Innovation: Think restaurant-branded frozen meals on grocery shelves (e.g., Panera soups, PF Chang’s bowls) or grocery-exclusive LTOs tied to digital restaurant loyalty apps.

 

Final Bite: A Cautious Appetite

While inflation has cooled from its 2022 peak, its legacy still shapes the way Americans eat. The narrowing price gap between grocery and restaurant meals is forcing a rethink — not just of where consumers eat, but how they eat.

From the rise of private labels and modular meals to hybrid channels like grocerants and branded retail products, brands are being challenged to deliver value, trust, and innovation — not just affordability.

As Johnson puts it:

“Success leaves clues. Today’s clues point to smaller meals, smarter choices, and hybrid solutions.”

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter