Foodservice in Retail: Incl Impact of COVID-19 - US - December 2020
Overview
 
What you need to know
Foodservice in retail had been a strong performer before COVID-19 and will emerge from the pandemic more essential than ever to grocery retailers’ long-term growth. But the competition for convenient meals is more intense than ever, putting a premium on even greater menu variety and but also facing even greater competition. Now is the time for retailers to explore expanded menus and ways to deliver even greater convenience and simplicity.

Key issues covered in this Report
●	The impact of COVID-19 on consumer behavior and the retail foodservice market.
●	Prepared food purchase motivations and barriers to use.
●	Shopper perceptions compared to other easy meal options.
●	Shopper interest in innovation areas.

Definition
This Report explores consumer attitudes/behaviors surrounding foodservice concepts in retail, specifically grocery retailing. “Foodservice concepts in retail” refers to any restaurants located in a store (this includes grocery-owned restaurants as well as partnerships with existing brands such as a Subway located in a Walmart) or any meals sold on-site that are created by store employees (ie not shipped in from a manufacturer). Hot soups, prepared sushi, rotisserie chicken, hot and cold food bars and on-site alcohol bars are all examples of foodservice concepts in retail.

Foodservice in retail also refers to prepared packaged foods (eg packaged employee-made sandwiches) as well as MTO foods (eg a station located in the store, where customers can have a meal made to order, such as a burger station). Throughout this Report the phrase “prepared food” refers to both prepared packaged and MTO food.

While this Report does cover general trends in the grocery retailing industry, the focus of the Report is on foodservice concepts in grocers. For an in-depth analysis of the grocery retailing industry in general, please look to Mintel’s Grocery Retailing: Incl Impact of COVID-19 – US, April 2020 Report.

This Report excludes prepared foods in convenience stores. For an in-depth analysis of foodservice trends in convenience stores, please look to Mintel’s Convenience Store Foodservice – US, March 2020.

This Report segments prepared food purchasers into three user groups (see Databook) to help illuminate the behaviors and attitudes of different types of prepared food customers throughout:

●	Heavy Users purchase prepared foods at least once a week.
●	Moderate Users purchase a few times a month to once a month.
●	Light Users purchase once every two to three months to a few times a year.

This Report builds on analysis presented in Foodservice in Retail – US, December 2019.

COVID-19: Market context
The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, remaining in place through May and in some cases June. During this time, referred to as lockdown, non-essential businesses and school districts across the nation closed or shifted to remote operations. With social lives on hold, the consumption of alcoholic beverages shifted to home. Many stocked up on alcoholic beverages for the months ahead. While it is true that a segment of Hispanics did so, many changed their spending priorities due to the pandemic, making alcoholic beverages a lower priority.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans. Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is available.

Economic and other assumptions
The analysis provided reflects an estimated range of the market’s prospects in light of the upheaval caused by the COVID-19 crisis. Our economic assumptions are based on CBO 10-year economic projections released on July 2, 2020. The CBO expects US GDP to fall by 5.8% in 2020 and recover to 4.0% growth in 2021. Unemployment estimates from the CBO indicate a 10.6% rate for 2020 and declining to 8.4% for 2021, which is slightly more positive than initial expectations (11.5% in 2020 and 9.3% in 2021) though expectations are that it will remain above 5% through 2025.