KANSAS CITY, MO. – Consumers are becoming less concerned about in-person shopping and dining away from home and this has led to some recoveries in the foodservice and retail sectors, consumer foods analysts with Rabobank said in a recent consumer behavior trends report.
“Foodservice sales have fully recovered, showing the first signs of ‘living with Covid,’” JP Frossard, analyst, and Tom Baily, senior analyst, said in the report. Restaurant foot traffic climbed 0.3% in January 2022 compared to January 2020, even as cases of the Omicron variant surged in the United States in December and January and inflation jumped 12.5%. But the recovery was uneven – both casual and fast-casual restaurants struggled, according to Rabobank.
The report also noted a shift in daypart for meals away from home. As many consumers continue to work from home, there are fewer occasions to grab a meal on the way to the office and fewer occasions for after-work gatherings at restaurants. This dynamic spurred growth in afternoon and midday demand over the past 12 months by 9.1% and 6.2%, respectively, the report stated.
“The implications of permanent work-from-home arrangements will consolidate the recent trends we have observed in the coming year. Shifting hours of demand are impacting working capital costs such as staffing, inventories, and utilities,” the report said. “Successful restaurants have optimized these dynamics: operating at 80% to 90% regular staff and simpler menus are two examples of reduced costs that have helped bottom lines.”
Taking meals at home is another trend persisting among consumers even as they become less wary about shopping in person, Rabobank said in the report. Losses in foot traffic at brick-and-mortar grocery stores narrowed in December (-0.2%) and January (-0.6%) compared to two years ago despite a surge in coronavirus cases driven by the Omicron variant.
Discount groceries are the beneficiaries of this trend due to higher inflation and lower fear of in-person shopping, according to Rabobank.
“On the opposite end, foot traffic at premium and natural stores remains far from the good old times; it has been offset by a 25% more expensive average shopping basket than pre-Covid (January 2019), the highest price increase of all,” Rabobank said in its report.
And online orders for groceries have remained steady at 2.8 orders per month, higher than pre-pandemic levels but lower than the initial months of the pandemic when consumers were hoarding items. Rabobank found that the average order amount increased 16% as consumers added more items to their virtual shopping carts.