From Restaurants to the Freezer Case?

According to the Restaurant Performance Index from the National Restaurant Association, Washington, D.C., restaurant activity has fallen below 2003 levels. A steady level is considered 100. During the first half of 2008, restaurant activity reached 98.5, with a low of 97.9 registered in May. In Jan. 2003, activity exceeded 99. In Jan. 2004, it increased beyond 103, indicating restaurant expansion, but it has declined since then.

Since consumers want convenient meal solutions, they are likely to look in the freezer case for more-economical alternatives. For the 52-week period ending March 2008, Information Resources, Inc., Chicago, reported sales of frozen foods in the dinner and entrée category surpassed $6 billion. Single-serve products led the category with $3.6 million in sales. Grab-and-go handheld products generated $1.3 million in sales.

Similarly, according to “Why This Downturn Will Be Different for Restaurants,” a Feb. 2008 report from the NPD Group, Port Washington, NY, as the restaurant industry has slowed, the market for ready-to-eat meals continues to grow.

“Consumers are getting fewer main meals at restaurants, and even though inflation at supermarkets is the highest it’s been in 17 years, there are more fast and inexpensive options available to consumers at grocery stores that didn’t exist years ago,” said Bonnie Riggs, author of the NPD report. “Ready-to-eat meals, frozen meals, etc. have multiplied over the years, giving consumers more options and putting additional downward pressure on the restaurant industry.”

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