As the holiday season approaches, consumers are showcasing a blend of enthusiasm and caution regarding their grocery shopping habits. Two recent reports from FMI — The Food Industry Association have unveiled insights into consumer behavior, revealing that shoppers are increasingly inclined towards prepared food options while also trying to navigate the challenges posed by rising food prices.
The “U.S. Grocery Shopper Trends: Holiday Season” report and the “Power of Foodservice at Retail” report both highlight that despite expressed worries about food costs, 73% of holiday celebrants are excited about the festive season. Notably, 85% of shoppers feel they have control over their grocery expenses this year, which lays the groundwork for a more confident approach to holiday meal preparation.
Leslie G. Sarasin, president and CEO of FMI, emphasized the resilience and adaptability of consumers. Shoppers are actively seeking deals, opting for store brands, and engaging in early holiday preparation. “Consumers remain understandably concerned about the cost of food impacting their holiday meal preparations,” Sarasin noted. However, this does not diminish their resolve to make the most out of their holiday experiences.
Dr. Richard Volpe, an economist, painted a more optimistic picture of the food market, indicating that food price inflation is predicted to be below average in 2024. While challenges persist with higher prices for meat and eggs, the cost of fruits, vegetables, and baked goods has seen a decline.
This year, many consumers have adopted a “hybrid” approach to their meal preparation. According to the latest findings, shoppers are integrating deli-prepared foods into their grocery routines, helping them manage time without sacrificing quality. In fact, the National Intelligence Quotient (NIQ) reports a 1.4% increase in sales of retail foodservice prepared foods, amounting to approximately $50.9 billion in 2024. This trend is expected to further accelerate as 13% of shoppers plan to increase their purchases of prepared foods in the coming holiday season.
Notably, 60% of consumers who celebrate the holidays believe that spending quality time with loved ones is the most significant aspect of the season, followed closely by 32% who prioritize creating homemade meals. To achieve these goals, 40% of consumers are planning their winter holiday preparations over a month in advance.
FMI’s findings underscore a consistent weekly grocery spending rate of $158, with 39% of holiday shoppers voicing concerns about potential out-of-stocks for essential items. For families with children, that concern increases to 44%. Interestingly, 46% of shoppers indicated that they would adapt by making familiar alternative dishes if preferred ingredients were unavailable, while 30% are open to exploring new recipes as part of their holiday planning.
Steve Markenson, FMI’s VP of research and insights, highlighted the importance of maximizing grocery budgets while maintaining the quality of celebrations. As shoppers adjust to economic conditions, their focus on budget-conscious strategies points toward an evolving landscape of consumer behavior.
Furthermore, the “Power of Foodservice at Retail 2024” survey revealed that nearly 71% of households regularly purchase retail foodservice products, with an average transaction size of $8.30. There has also been a slight uptick in the frequency of home-cooked meals, with 23% of shoppers cooking dinner at home at least seven times per week, compared to 21% the previous year.
Nutrition remains a focal point for many shoppers; 63% of them aim for nutritious options when selecting deli-prepared foods. The demand for convenience-driven meals continues to flourish, with shoppers expressing interest in purchasing bundled meal options — including main courses, sides, and desserts — at discounted prices.
Rick Stein, VP of fresh foods at FMI, emphasized that the surge in demand for ready-to-eat options underscores the shifting dynamics of purchasing behaviors. As evolving work patterns and health-conscious choices influence consumer preferences, the convenience of retail prepared foods is likely to remain a significant driver of market growth this holiday season.
As retailers gear up for the holidays, understanding consumer sentiments and spending habits will play a critical role in influencing inventory and promotional strategies. The continued inclination towards prepared foods, in combination with budget-conscious shopping, suggests that consumers are prioritizing both convenience and quality, adapting their shopping habits to meet holiday demands.
In conclusion, this holiday season promises to be a unique blend of tradition and modern consumer preferences. Retailers who can align themselves with these insights will be well-positioned to meet the evolving needs of shoppers eager to celebrate with loved ones while managing budgets effectively.
