• by Nina Lentini  @Nina_Lentini, September 13, 2007

For the last two years, food service operations at retail outlets like convenience stores, supermarkets, discount stores and price clubs have been driving traffic at twice the pace of other segments of the restaurant industry, a new study finds.

Why? Because they are offer packaged meals, which plays into consumers' preference for convenience and speed.

"For years, supermarkets and convenience stores were outlets for 'packaged foods,'" says Harry Balzer, vice president of The NPD Group. "But the growth of the restaurant industry during the past 25 years--and especially the growth of take-out meals--has shown everybody in the food market that consumers now want 'packaged meals.' "

For the year ending May 2007, says Port Washington, N.Y.-based The NPD Group, about eight billion meals and snacks were bought at retail.

While total restaurant traffic grew by 3% over the past two years, food service purchases at retail stores outperformed the total industry with 5% growth in the number of meals bought for immediate consumption.

NPD reveals that convenience stores are the most frequented channel for purchasing prepared foods and beverages at retail, capturing 54 percent of all food service traffic at retail outlets, followed by supermarkets (32% share). However, discount stores (such as Wal-Mart and Target) and price clubs are showing the strongest rate of food service growth.

Consumers told NPD that they visit supermarkets for a number of reasons; a convenient location, they "always go there," and because they "like going there;" they visit convenience stores primarily for expediency.

It appears, then, that the upcoming British invasion is right on target.

Tesco, the third-largest food retailer in the world, plans to open "Fresh & Easy" markets in the Southwest this fall, wooing time-pressed shoppers looking for good food and a quick meal.

As one retail consultant told Marketing Daily earlier this year, "Tesco is all about being convenient, not just being a convenience store, and Americans have shown they are wide open to that--look at all the people who go into a Costco just for a hot dog and a drink or are willing to buy a cup of coffee at a Walgreen's."