Thursday, June 29, 2023

Inflation Is Driving Change in Consumers Path to Purchase


At the intersection of price increases at the grocery store, restaurants, convenience stores, even most dollar store items are now higher than a dollar; that consumers are looking for meal convenience. According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® are searching for convenient meal solutions at a price and are willing to shift meal periods by daypart while exploring new channels of fresh food distribution.

Today, morning coffee is more likely to be prepared and consumed at home, so retailers should even more closely monitor the amounts that are brewed to prevent excessive waste and how often the offerings are refreshed during the early hours. For stores with bakeries, that is also likely to affect the sales of breakfast pastries such as doughnuts, muffins and Danishes. Bundling these bakery items with lunch offerings may provide a way to boost sales in this category.

Consumers are not eating less, they are eating at different times of the day and getting meals and meal components from outlets that they had not tried before or wanted to try.  However, rising inflation resulting in higher prices for ingredients and the need to pass those higher prices on to consumers, grocery stores, restaurants and c-store retailers are all concerned about how these factors will affect their foodservice sales. In fact, research shows that inflation is the No. 1 concern for many retailers. Why because it is the No. 1 concern for consumers.

Every time the gas prices goes up, foodservice sales decline in one sector or another as customers have less discretionary money to spend on food. Inversely, when gas prices go down foodservice sales rise. Today consumers are experimenting with their nontraditional channels of distribution looking for a meal solution that does not include cooking from scratch every meal every day according to Johnson.

To maintain customer interest, retailers must constantly provide new and interesting menu items and promotions. Despite the relaxation of restrictions, many people are still working from home and, it seems, will continue to do so for the foreseeable future. For some legacy food retailers, fewer morning commuters has pushed the traditional breakfast rush to later in the day, more toward lunch time.

That said, limited time offers and promotions are most likely to be successful if they focus on lunch fare. Bundling can also work here as well to help build sales of items such as sandwiches and salads, sides such as chips, and hot and cold dispensed or ready-to-drink beverages.

Many consumers are most concerned about value rather than just price. They are willing to pay a little more for high quality and will accept smaller portions such as grab-and-go sliders and individual decadent desserts if the value incentive is there.

Don’t discount that fact that inflation can also make loyalty programs even more attractive to customers, making this an excellent time to promote them. Cents off and buy one, get one offers for loyalty members appeal to their thrifty side. Also popular with customers are promotions to buy a set number of an item to earn one free — for example, buy six cups of coffee and get the seventh one free.

The reduction of evening commuters has also had a negative impact on the dinner demand. As in the morning, consumers are more likely to prepare their evening meal at home. Many are also turning to services such as DoorDash, Uber Eats and Grubhub to deliver their food to them.

Consumers can be out and about at any hour of the day or evening, making any time a potential snack time. Retailers with roller grills should keep them stocked with fresh items to accommodate their appetites. Other grab-and-go items such as chicken tenders, pizza slices and sliders can also go beyond lunch to satisfy day or evening snack cravings. Where, when, and how are your customers getting their meal solutions?

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: or 253-759-7869

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