Loving Leftovers: Food Prices Change The Way Americans Eat

plate with foodBring on the casseroles and the leftovers. It turns out that the steep increases in food prices are changing the way Americans shop, cook and eat.

"Among people who are worried about finances, almost 60% say they are eating leftovers for dinner at least once in a two-week period," says Harry Balzer, VP of The NPD Group, a market research company that recently issued a report on changing food habits. "That's a lot-and for dinner, not for lunch."

And 55% say they are preparing more meals at home than they did a year ago, while 54% are stocking up on groceries. The report, which found one third of adults feel their financial situation is worse this year than last, says those with larger families are most concerned.

The biggest winner, he says, is a cozy four-letter word: Home. "In uncertain times, home is going to become a greater source for meals and snacks. It's where we have always liked to eat," he says, pointing out that one of the few growth areas in restaurants in recent years has been in take-out. Last year, 80% of meals and snacks were consumed at-home versus 20% at restaurants, and NPD says the restaurant industry posted no organic growth in 2007.



But supermarkets also stand to be big gainers, he says. "If the last century was the century of prepared foods, this will be the century of prepared meals," he predicts, "and supermarkets are now providing both."

American consumers, who first fell for the prepared meal concept back in the 1990s, as popularized by chains like Boston Market and then by Whole Foods Markets, are happy to buy prepared products at most supermarkets. "People love this stuff, and when people talk about how expensive Whole Foods is, I think they may be missing the point-I don't think most shoppers feel Whole Foods is expensive compared to other stores. They think it's cheap compared to restaurants."

Part of what makes shifting consumer habits so intriguing now, he says, is that for the first time, a sharp rise in food costs isn't being offset by hordes of women joining the workforce. "It's the single biggest change in my 30 years of watching the food industry," he says. "Every year, there would be a greater proportion of women participating in the labor force than the year before. So, despite any economic downturn, there would be more money in the household, less time, and greater pressure for companies to provide value-added food." That ended in 2000, he says, when workforce participation leveled off.

Still, despite food increases of 17%, it's probably a little soon to predict just how willing Americans are to rethink their meal strategies. "It's hard to change," says Frank Badillo, chief economist, TNS Retail Forward. "And for a lot of shoppers, changing your food-shopping habits is especially difficult."

He expects that definitive evidence of bigger consumer changes-whether it's a spike in freezer sales, as more people buy in bulk, or stocking up on Tupperware-is probably a few months away. "People know they're hurting and that they have to change, but there's a lag. They don't do it right away."

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