The U.K. Retail Foodservice

The U.K. Retail Foodservice
Prepared by: GAIN consumer insights RECOGNIZE menu trends IDENTIFY opportunities ASSESS ingredients EXAMINE pricing strategies REFINE marketing Attitude and usage study insights for foodservice executives The U.K. Retail Foodservice Consumer Trend Report

Report Outline Slide Introduction….…………………………………………..………………………………………………………………………… 3 Methodology….……………………………………..…………………………………… Menu Insights…………………………… Consumer Insights….…………………………………………………………………………………………………………… 19 Outlook: Trends to Watch …………………………………….…….………………………………………………… 79 Glossary of Foodservice Terminology…………………………….…….……………………………………………… 81 Consumer Demographics..…………………………..…….………………….……………………………………………. 86

Introduction Consumers’ increasing time pressures and demand for convenient away-from-home meals favour the growth of the retail foodservice channel. Retail foodservice allows consumers to purchase meals while visiting retailers for groceries or other purchases, in turn, saving consumers time. Furthermore, facing a double-dip recession, some consumers are trading down from purchasing meals at restaurants to purchasing meals from retail foodservice. Technomic’s research also shows promise for the retail foodservice channel. Consumers believe that retail foodservice operators offer better prices, overall value and convenience than limited- and full-service restaurants, and that the taste, freshness and quality of retail foodservice offerings are generally on par with restaurants. In addition, consumer data points to opportunities for retailers to leverage their customisation options and new and unique food offerings to gain share of foodservice occasions. The expansion of retail foodservice offerings puts retailers in a solid position to meet growing consumer demand for convenient meals and to compete with restaurants, particularly for takeaway occasions. To help foodservice executives better understand consumer behaviour, preferences and attitudes regarding retail foodservice, Technomic has developed the 2012 U.K. Retail Foodservice Consumer Trend Report. The report covers both prepared foods (such as ready-to-eat or ready-to-heat items) and cafés located in the foodservice areas of retail stores. The Menu Insights section provides a comprehensive guide to the trends that continue to shape the retail foodservice market and how they are leveraged across varied retail segments. An online survey of 1,000 consumers reveals consumers’ retail foodservice usage and sourcing, and uncovers attitudes and preferences that impact retail foodservice purchasing decisions.

Methodology The following methodology was employed for the production of this report: Mining of existing secondary data: To uncover and analyse current trends related to retail foodservice, extensive background research was conducted. A key source was Technomic’s Digital Resource Library (DRL). The DRL, which is updated daily, tracks and houses industry news from more than 50 print and online sources. Additional research was gathered through Technomic’s Knowledge Centre, one of the most extensive foodservice libraries in the industry. In-depth search and analysis of restaurant menus: Particularly for the Menu Insights section of this report, Technomic’s MenuMonitor database was utilised. By conducting an in-depth search of menus from the top 10 leading retailers for onsite prepared foods, Technomic was able to showcase menu incidences and trends. Data in the Menu Insights section of this report is based on MenuMonitor pulls for the period of January through March 2012. Quantitative consumer research: A 20-minute online survey of 1,000 U.K. consumers was conducted in July Consumers were asked to report their consumption, preferences and attitudes regarding retail foodservice. The margin of error for data collected for the full U.K. respondent set is plus or minus 3.1 percentage points at the 95% confidence interval. The consumer sample is representative of the U.K. population according to census data.

Exhibit 1 lists each of the retail segments discussed in the report along with the companies within each segment that were included in Technomic’s consumer survey Exhibit 1 Key Finding: So that Technomic could gauge the menu, concept and consumer trends that are most important to the retail foodservice category, only the leading retail segments are within the scope of this study. Retail foodservice is defined by product, location in the retail store and format. Retail foodservice can best be defined as those products found in the section or sections of a retail store where consumers are able to pick up ready-to-eat or ready-to-heat foods. Retail foodservice also includes cafés in retail stores.

Menu Insights

For breakfast, major retailers’ foodservice sections largely focus on two offerings: a portable main dish and a beverage Exhibit 2 Key Finding: Exhibit 2 provides a breakdown of all foodservice breakfast offerings available at leading prepared-food retailers tracked by MenuMonitor. Out of 184 total breakfast items, MenuMonitor data shows that non-alcohol beverages are the most prevalent offering, with a total of 90 items, followed by main dishes. Nine leading retail chains offer main dishes for breakfast, with a total of 51 items, averaging between five and six such offerings per store. There are also 23 side items listed at eight chains, translating to about three breakfast side options per chain.

The portability attributes of sandwiches and their restaurant-quality preparations make them convenient, craveable choices for a quick breakfast Exhibit 3 Key Finding: Exhibit 3 shows the most frequently offered types of main courses available at retail food stores for breakfast. Of the 51 main-course items available, sandwiches are the top option. It is likely that consumers readily perceive sandwiches as an ideal takeaway item for breakfast, since they’re familiar with breakfast sandwiches in other quick-service formats. In the morning, therefore, these retailers are more likely to market breakfast sandwiches than other types of prepared-food items.

Bread-based sides—ranging from toast and croissants to baked goods like muffins and pastries—are the leading side offering for retail foodservice breakfasts Exhibit 4 Key Finding: Of the nearly two dozen side items available at supermarkets and other major markets for breakfast, the vast majority are breads. MenuMonitor data shows that grain-based items like toast, muffins, croissants, etc., are the leading type of side offering, with 18 such items listed at eight supermarket chains. Although it’s not shown in Exhibit 4, pastries comprise the bulk of these bread-based sides; seven of the 18 sides are items such as teacakes and scones.

Although retailers offer a plethora of starters, desserts, sides and add-ons, the lion’s share of prepared items is represented by main dishes and non-alcohol beverages Exhibit 5 Key Finding: Exhibit 5 shows all items available for lunch and dinner at leading retailers. All 10 of the top retail stores offer food and drink for the midday and evening dayparts. According to the most recent data, these major markets listed 476 total items for lunch and dinner, the bulk of them main dishes and non-alcohol beverages

Starter soups and salads signal classic or traditional menu positioning in retail foodservice formats Exhibit 6 Key Finding: Technomic’s menu research consistently finds that soups and salads are the two leading types of starters in quick-service restaurant settings; the same holds true in quick-service retail formats. Six out of the 10 leading food markets offers soup as a starter, while three of the industry’s top markets offer salad. Starter salads make for a light meal or a healthful accompaniment to a sandwich or other main course. Soups are traditional starters that are also highly portable, easily positioned as either light or indulgent, and suitable to accompany a main course.

Hot and cold sandwiches lead all other main courses at major retail chains
Exhibit 7 Key Finding: Exhibit 7 shows that the top main-course choice in the retail foodservice arena is the sandwich. Sandwiches offer an affordable price point, averaging £3.39—one of the lower average prices for a main course. Vegetable mains are the second most frequently listed type of lunch and dinner option available at retailers. According to MenuMonitor, most of these vegetable dishes are jacket potatoes. Customisable jacket potatoes provide a portable, satisfying lunch or dinner option.

As we saw for the breakfast daypart, breads are also the most prevalent sides for lunch and dinner
Exhibit 8 Key Finding: Breads are the leading side-item option for lunch and dinner offerings at supermarkets, with six of the top brands each listing three to four bread sides on average. Bread sides (including artisan rolls, garlic bread or breadsticks) are likely offered in retail foodservice formats as sides that will complement soup, salads and other types of main courses that routinely appear on menus in this sector. This differs from the breakfast daypart in that breads served in the morning often comprise the full meal, whereas for lunch and dinner they function as a side to a main course.

Easily portable desserts are a must for retail formats; on-the-go handheld treats like biscuits, small cakes and other baked goods are most commonly listed Exhibit 9 Key Finding: Baked goods—biscuits, individual-sized cakes and other handheld sweets—fit in well with the service format and expected price point of a retail foodservice outlet. By a large margin, these items are the most frequently listed type of sweet treat offered as prepared foods at major retail stores, with 26 items at seven of the top retail chains. According to MenuMonitor, the average price of these items was £1.85. On average, each store offers between three and four different baked goods for prepared-food customers to choose from.

Retail locations are leveraging growing preferences for speciality coffee and have made it the leading type of drink in their foodservice sections Exhibit 10 Key Finding: Speciality coffee is one of the most notable menu-development trends for non-alcohol beverages. The appeal of espresso-based mochas, café lattes, cappuccinos and macchiatos is growing, and many quick-service restaurants are capitalising on this appeal. The retail sector is keeping pace with this trend, with eight of the 10 top markets listing a total of 52 speciality coffees. On average, each major market offers between six and seven different speciality coffees, and speciality coffee accounts for about 37% of all non-alcohol beverages available.

Ready-to-heat Chicken Farfalle main course by Tesco
Menu Insights Convenience-Store Offerings Prepared food and drink in the convenience-store sector is trending toward restaurant-style menu promotions to accompany restaurant-quality food offerings. Convenience stores and other retailers can get started with expanded foodservice offerings by providing some simple items that showcase freshness and thus improve the customer perception of quality. From Little Waitrose: Good to Go salads, sandwiches, snacks and beverages High-Street Retailer Offerings One of the top foodservice trends for high-street retailers calls for a wider variety of upmarket ready meals. For example, Tesco has just launched a new range of high-quality, ready-to-heat prepared foods under its own label. Ready-to-heat Chicken Farfalle main course by Tesco Source: Waitrose.presscentre.com and TheGrocer.co.uk

Petersham Nurseries Cafe in Richmond
Menu Insights (cont.) Cash-and-Carry Stores’ Foodservice Offerings Wholesale cash-and-carry stores are bolstering their ready-meals range to effectively compete with supermarkets, particularly for catering programmes. For its catering range, Booker’s offers Booker’s Basics and Chef’s Larder main courses Garden-Centre Foodservice Offerings Many arboretums are exploring opportunities to expand their retail presence with restaurants that complement the garden-centre positioning. These new concepts range from simple cafés to full-service, award-winning eateries with extended menus for all three dayparts. Petersham Nurseries Cafe in Richmond Source: Booker.co.uk and Guardian.co.uk

From Tesco’s line of ready-to-heat Mexican main courses
Menu Trends in Action Restaurant Inspirations The trademark positioning for retail foodservice is the idea of giving consumers the ability to source restaurant-style foods in a retail setting. Sauces, seasonings, bolder flavours, and full meals with vegetable sides help drive home the positioning of prepared foods as being equal in quality to restaurant items. Keeping pace with restaurant-quality preparations: Morrisons’ M Kitchen Bistro range Ethnic Foods & Flavours As Mexican cuisine continues to gain ground, the consumer expectation of its availability is also poised to shift. To meet evolving preferences of consumers, a number of supermarket brands are focused on providing Mexican-style favourites packaged as ready-to-heat prepared foods. From Tesco’s line of ready-to-heat Mexican main courses Source: Morrisons.co.uk and Tesco.com

Consumer Insights

Supermarkets far surpass other retailers for prepared-food purchases, followed by convenience stores and high-street retailers Exhibit 11: Have you ever purchased prepared foods from the following types of retail stores or other locations? (“yes” response, by gender) % Overall 98% 77% 76% Key Finding: Nearly all consumers polled (98%) say they have purchased prepared foods at supermarkets or hypermarkets such as Asda, Morrisons, Sainsbury and Tesco. The fact that these stores are visited by nearly all consumers polled points to the strong appeal of retail foodservice offerings at major supermarkets. About three out of four consumers (77%) indicate that they have purchased prepared foods at convenience stores, news agents or petrol stations. Nearly as many consumers (76%) have visited high-street retailers. 28% 23% Base: 1,000 consumers aged 18+

% Purchase once a month +
The frequency of traditional supermarket prepared-foods purchases signal that consumers like the convenience of picking up ready meals while shopping for groceries Exhibit 12: How often do you purchase prepared foods from each of the following locations? % Purchase once a month + 98% 85% 80% 53% Key Finding: Nearly all consumers (98%) who purchase prepared foods at supermarkets do so at least once a month, and 64% do so once a week or more often. Once again, this is likely due to the fact that consumers often visit these locations for groceries and find it convenient to pick up meals while grocery shopping. (As we will see later in Exhibit 28, 53% of consumers who report that convenience is important in deciding to purchase retail foodservice say the fact that they can pick up a ready-to-eat meal while shopping for other items impacts their decision.) 51% Base: 982 (traditional), 774 (convenience), 761 (high-street), 276 (garden) and 234 (cash) consumers aged 18+ who purchase prepared foods at these locations

Consumers purchase the largest proportion of their retail foodservice meals from the grab-and-go section, followed by the deli or bakery area Exhibit 13: What percent of the prepared foods you purchase are purchased from the following prepared-foods areas? (by gender, means shown) % Overall 35% 25% 20% Key Finding: Consumers indicate that, on average, more than a third (35%) of their retail foodservice purchases are grab-and-go or pre-packaged items, such as ready-made salads and sandwiches, picked up from a sandwich area or chiller. Pre-packaged items may be especially appealing for on-the-go consumers and for those who need a quick meal at an affordable price. 20% Base: 1,000 consumers aged 18+ 22

Consumer data indicates that supermarkets are the only type of retailer measured to see a net gain in retail foodservice patronage over the past year Exhibit 14: Are you purchasing prepared foods more often, less often or the same amount as you did one year ago at the following locations? Key Finding: By and large, consumers are purchasing prepared foods with the same frequency they did a year ago. The exception is traditional supermarkets: a quarter of consumers (24%) who purchase prepared foods at traditional supermarkets indicate that they are doing so more often than they did one year ago, compared to 13% who say they are doing so less often. This suggests that consumers are increasingly purchasing prepared foods at the retail locations they often visit for groceries. Base: 982 (traditional), 774 (convenience), 761 (high-street), 276 (garden) and 234 (cash) consumers aged 18+ who purchase prepared foods at these locations

Convenience and affordability are driving increases in prepared-food purchases
Exhibit 15: Why are purchasing prepared foods more often? Select all that apply. (by gender) % Overall 75% 55% 39% 39% 38% Key Finding: Consumers who indicated that they are purchasing prepared foods more frequently were asked about their reasons for doing so. Three-quarters (75%) cite convenience as a reason for purchasing prepared foods more often, making convenience the primary reason for consumers’ increased prepared-food purchases. More than half of consumers (55%) cite affordability as a reason they are purchasing prepared foods more often. 37% 34% 27% Base: 348 consumers aged 18+ who are purchasing prepared foods more often 24

Although convenience and affordability are generally the main drivers for increased prepared-food purchases, the quality of food tops affordability at high-street retailers Exhibit 16 Key Finding: The previous exhibit looked at overall drivers for increased retail foodservice purchases. Exhibit 16 breaks down drivers by retail segment. In addition to convenience and affordability, consumers report various reasons for purchasing prepared foods more often from each location. the quality of food and beverages plays an important role in the increase of prepared food purchases at high-street retailers. In fact, the quality of the items tops affordability in this segment, indicating that consumers visiting high-street retailers may be willing to pay more for high-quality prepared foods.

Prepared-food purchases primarily come at the expense of fast-food restaurant meals, likely because both locations offer fast, convenient service and low prices Exhibit 17 Key Finding: More than two out of five consumers who say they are visiting traditional supermarkets (47%), convenience stores (47%) and high-street retailers (43%) more often for prepared foods report that these visits are at the expense of fast-food restaurants. Fast-food restaurants pride themselves on low prices and speedy service—also main drivers for prepared-food purchases. As such, many consumers are likely purchasing retail prepared foods instead of fast-food offerings when they need a quick, affordable meal.

Retailers may have opportunities to increase incremental prepared-food sales through value-oriented initiatives Exhibit 18: Why are you purchasing prepared foods less often? Select all that apply. (by gender) % Overall 69% 19% 18% 13% 10% Key Finding: Exhibit 15 showed that affordability is the second leading driver of consumers’ increases in prepared-food purchases. However, consumers who have been cutting back on prepared-food purchases also cite price as a primary factor. Seven out of 10 consumers (69%) who are purchasing prepared foods less often than they were one year ago say it is because of price. The data among this select group of consumers differs from the other prepared-food consumers, who generally perceive retail foodservice to offer a strong value proposition. 10% 9% Base: 410 consumers aged 18+ who are purchasing prepared foods less often 27

In-store marketing methods may help boost incremental traffic and sales for retail foodservice offerings Exhibit 19: Please select the statement that best describes your prepared meals purchases? (by gender) I usually… % Overall 53% 17% Key Finding: Consumers generally purchase retail prepared foods when they are either visiting specifically for these items or as a second thought or impulse purchase when they are shopping for groceries or other items. Exhibit 19 shows that more than half of consumers polled (53%) usually purchase prepared items during these secondary occasions, when prepared foods are not the main reason for visiting. For these consumers, retail prepared foods are not so much a traffic driver as they are appealing options at a store they are already visiting. 16% 14% Base: 1,000 consumers aged 18+ 28

The majority of consumers say that while they sometimes purchase a full prepared meal, they sometimes just purchase individual meal elements Exhibit 20: How would you best describe the prepared food items/meals you purchase from retail locations? (by age) % Overall 66% 18% Key Finding: Two-thirds of consumers (66%) report that their retail prepared-food purchases vary; on some occasions, they purchase one element of a meal, and on others, they may purchase an entire meal. A sixth of consumers (16%) say they usually purchase side items or smaller individual-portion dishes to go with other foods, pointing to opportunities for retailers to boost cheque averages. 16% Base: 1,000 consumers aged 18+ 29

Consumers prefer to purchase retailers’ prepared foods at convenient locations near their home, work or school and where they typically shop for groceries Exhibit 21: Thinking about the retail store you usually visit for prepared-food purchases, what are the main reasons why you visit this establishment? Please choose up to five. (by gender) % Overall 42% 41% 29% 28% Key Finding: Overall, consumers cite convenience as their top driver for retail foodservice purchases. Two-fifths of those polled usually purchase prepared foods at their preferred store because it is conveniently located near their home (42%) and because it is the same store where they shop for groceries (41%). Additionally, a quarter of consumers (24%) visit their preferred retail store for prepared foods because it is convenient to their workplace or school. 24% 22% 16% Base: 1,000 consumers aged 18+ 30

Taste and freshness are important to consumers when choosing a restaurant, and the same holds true for consumers who purchase prepared foods from retail foodservice Exhibit 22: Thinking about the retail store you usually visit for prepared-food purchases, what are the main reasons why you visit this establishment? Please choose up to five. (by gender) % Overall 36% 29% 28% 27% Key Finding: Technomic research shows that taste and freshness are highly important to foodservice consumers. While taste and freshness expectations vary from one type of foodservice to another, consumers still expect to receive tasty, fresh fare regardless of where their food is purchased. Exhibit 22 shows that when purchasing prepared foods, 36% of consumers chose to visit their preferred retailer because the food tastes good. Furthermore, 29% of consumers cite freshness as a reason for purchasing prepared foods from their preferred retail store. 19% 15% 12% Base: 1,000 consumers aged 18+ 31

While the value proposition is important to a third of consumers, 64% say that price is one of the most important factors in their decision to purchase prepared foods Exhibit 23: Which of the following attributes are most important in your decision to purchase a prepared item or meal from a retail store? Please choose up to FIVE responses. (by age) % Overall 64% Key Finding: Almost two-thirds (64%) of consumers say that price is one of the top five most important factors in their decision to make prepared-food purchases, and more than a third (36%) say they strongly consider overall value. Price may play a larger factor in the overall value equation in retail settings than it does at restaurants. Other factors of the value equation such as service, ambiance and décor are less likely to come into play for retail foodservice than for restaurant purchases. 36% Base: 1,000 consumers aged 18+ 32

Taste and freshness are the two most important attributes in the retail foodservice purchasing decision Exhibit 24: Which of the following attributes are most important in your decision to purchase a prepared item or meal from a retail store? Please choose up to FIVE responses. (by gender) % Overall 76% 70% 56% 49% Key Finding: Technomic typically finds that taste, freshness and quality of food play the strongest roles in consumers’ restaurant purchasing decisions. As shown in Exhibit 24, this pattern extends to retail prepared-foods purchases as well. Three-quarters of consumers (76%) say that the taste of the food is one of the top five most important attributes they weigh when purchasing prepared foods. The majority of consumers also say that the freshness (70%) and the quality (56%) of the food offered at retail prepared-food areas are also very important factors. 33% 15% 8% Base: 1,000 consumers aged 18+ 33

Two-fifths of all consumers report that the cleanliness of the prepared-foods area is an important factor in their retail foodservice purchasing decision Exhibit 25: Which of the following attributes are most important in your decision to purchase a prepared item or meal from a retail store? Please choose up to FIVE responses. (by age) % Overall 41% Key Finding: Sanitation and cleanliness are crucial in the foodservice industry, particularly in preventing foodborne illnesses. Exhibit 25 reiterates the importance of this, with two-fifths of consumers (41%) placing high importance on the cleanliness of the prepared-foods area. As discussed in the previous exhibit, retail establishments are unique in that the prepared foods offered are generally visible to the customer before purchase. Similarly, the area where the food is prepared in a retail setting is typically also visible to the customer. 11% Base: 1,000 consumers aged 18+ 34

Consumers expect that prepared-foods areas will offer both a wide array of portion sizes for food offerings and a wide range of non-alcohol beverages Exhibit 26: How important are the following factors in your decision to purchase a prepared item or meal from a retail store? (by gender, top two box = important and extremely important) % Overall 62% 51% 33% 29% Key Finding: As we saw in Exhibit 20, two-thirds of retail foodservice consumers (66%) sometimes purchase a full prepared meal and sometimes just purchase individual meal elements. Therefore, it is no surprise that variety is important in consumers’ decision to purchase a prepared item or meal from a retail store. Half of consumers (51%) find variety of portion sizes to be important, for example. Furthermore, three out of 10 consumers (29%) place importance on the variety of non-alcohol beverages available when they’re purchasing prepared foods. 28% 27% Base: 651 (samples), 632 (portion), 590 (combo), 623 (non-alcohol) 607 (special) and 630 (uniqueness) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 35

Three-fifths of consumers consider overall convenience to be highly important in their decision to purchase prepared foods Exhibit 27: How important is overall convenience in your decision to purchase a prepared item from a retail store? (by age and gender, top two box = important and extremely important) % Overall = 61% Key Finding: Three-fifths of consumers (61%) report that overall convenience plays an important role in their decision to purchase a prepared item or meal from a retail store. Convenience is especially important for women. Beyond convenience factors, such as location, consumers are also likely considering in-store attributes when assessing the role of convenience in their decision to purchase a prepared item or meal from a retail store. Operators will want to make sure that the location and organisation of the prepared-foods area are as convenient as possible. Base: 608 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 36

Prepared foods provide consumers with a timely option that saves them from going out of the way
Exhibit 28: Which specific aspects related to convenience are most influential in your decision to purchase a prepared meal? Please choose up to FIVE responses. (by gender) % Overall 67% 60% 53% 52% 43% Key Finding: Technomic asked respondents who indicated that convenience was an important consideration for prepared-food purchases what specific aspects of convenience are most influential in their purchasing decision. Data shows that consumers are most interested in being able to easily and quickly purchase prepared foods while saving time. An overwhelming majority of consumers say that saving time (67%) and not having to go out of their way (60%) are two of the most important aspects of convenience related to retail foodservice purchases. 41% 37% 36% 26% Base: 554 consumers aged 18+ who chose a top three box response indicating that overall convenience is important 37

A friendly, knowledgeable staff contributes significantly to consumers’ decision to purchase prepared foods from a retail store Exhibit 29: How important are the following factors in your decision to purchase a prepared item or meal from a retail store? (by age, top two box = important and extremely important) % Overall 37% 29% 22% Key Finding: When consumers are deciding whether or not to purchase retail foodservice offerings, the staff and the atmosphere of the prepared-foods section both play important roles. Nearly two-fifths of consumers (37%) are influenced by the friendliness of the staff, and more than a fifth (22%) say it is important for the staff to be knowledgeable. Therefore, operators will want to make sure that staff is well-trained and knowledgeable about the food. 12% Base: 637 (knowledge), 632 (décor), 606 (friendliness) and 606 (kid) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 38

Because prepared foods are often purchased for takeaway, packaging that is appropriately sized and maintains food integrity is essential Exhibit 30: How important are the following factors in your decision to purchase a prepared item or meal from a retail store? (by gender, top two box = important and extremely important) % Overall 41% 26% 22% Key Finding: Of all packaging-related factors, the availability of individual-sized packaging is important to the most consumers; 41% say individually portioned packaging is highly important in their decision to purchase prepared foods. Similarly, 19% of consumers factor in the availability of family-sized packaging. A quarter of consumers (26%) say it is very important that packaging for prepared foods be segmented into compartments that keep food separated. Compartments play a role in ensuring food integrity, as items that may not mix well 19% 16% Base: 650 (individual), 641 ( family), 635 (microwaveable), 631 (environment) and 621 (compartments) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 39

On average, consumers are willing to pay more for a full meal at a restaurant than at a retail establishment Exhibit 31: What is the most you are willing to pay for one full meal (including a main course, side, dessert and beverage for one person) at the following locations? (means shown) Key Finding: Technomic asked consumers to indicate the most they would be willing to pay for a meal at several types of foodservice retailers and restaurants. The highest acceptable price points are at full-service restaurants. On average, consumers say that they would be willing to pay nearly £17 for a full meal. Among retail stores, consumers report that they would be willing to pay the most at a garden centre (£7.50 for a full meal). Base: 1,000 ( LSR/FSR), 916 (traditional), 631 (convenience), 553 (high-street), 102 (garden) and 99 (cash) consumers aged 18+ who purchase prepared foods at these locations 40

Retailers will want to provide some healthful prepared foods; more than a third of respondents say health and nutrition play a role in their prepared-food purchases Exhibit 32: I usually consider health/nutrition when purchasing prepared meals at retail stores. (by age and gender, top two box = agree and agree completely) % Overall = 37% Key Finding: As we saw in Exhibit 22, 15% of respondents say the availability of healthy options is one of the reasons they often visit a particular retail store for prepared foods. Data in Exhibit 32 supports this finding: more than one-third of respondents (37%) indicate that they consider health and nutrition when purchasing prepared meals at retail stores. Respondents aged 34 and under are particularly likely to purchase healthful retail fare (47%, compared to 33% for those aged 35+). Base: 686 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 41

Positioning retail foodservice items as “premium” and “natural” will likely resonate more strongly with consumers than traditional health descriptors Exhibit 33: Please indicate how important the availability of _____ is in your decision to purchase a prepared item or meal from a retail store. (by gender) % Overall 50% 48% 41% 31% Key Finding: Half of respondents say the availability of premium-quality items (50%) and “natural” items (48%) is an important attribute they consider when purchasing a prepared meal from a retail store. The fact that consumers place a greater importance on “premium” and “natural” ingredients than on having calorie counts or other nutritional information available for menu items suggests that health-halo claims such as “premium” and “natural” will resonate more strongly than traditional health claims such as “lowfat,” “low-calorie” or “low-carbohydrate.” 26% 21% Base: 1,000 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 42

Consumers say that items on a hot food bar need to be replenished more often than other types of prepared food in order to ensure freshness Exhibit 34: How often do the following types of prepared foods need to be restocked or replenished for you to consider them fresh? Key Finding: At a hot food bar, nearly half of respondents (45%) believe that prepared foods need to be restocked three or more times a day in order for them to be considered fresh. Another quarter (26%) indicate that hot prepared foods should be replenished twice per day in order for them to be considered fresh. Hot food bars contain items such as a rotisserie chicken that will be overcooked and dry if they’re kept warm all day, resulting in a disappointing purchase for consumers. Base: 1,000 consumers aged 18+ 43

A quarter of consumers, and 38% of those aged 25–34, demand more name-brand foods in retailers’ prepared-foods sections Exhibit 35: I would like to see more name brand foods used in retailers’ (supermarket, c-store or other) prepared-foods sections. (by age and gender, top two box = agree and agree completely) % Overall = 25% Key Finding: Retailers have an avenue of opportunity to offer prepared-foods consumers a variety of brand-name items including meats, dairy products and condiments. One in four respondents (25%) would like to see more name-brand foods in retailers’ prepared-foods sections. Retailers could use this as an opportunity to position brand-name foods to signal quality to consumers—something that would be particularly appealing to consumers aged 25–34. Base: 673 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 44

More than a third of consumers are open to trying new, unique and ethnic flavours for prepared foods at retail stores Exhibit 36: Please indicate your agreement with the following statements. (Top two box = agree and agree completely) Key Finding: Two-fifths of consumers (39%) indicate that they would like retail stores to offer more prepared foods that feature new or unique flavours. Retail operators could consider introducing new and unique flavours in common menu items such as sandwiches and salads. Three in 10 (31%) respondents indicate that they would be more likely to try new or unique foods offered at retail foodservice stores than at restaurants. That makes retail foodservice a low-risk way for consumers to try new, unique and ethnic dishes. Base: 671 (new/unique), 672 (ethnic) and 678 (try) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 45

Consumers aged 25–44 in particular prefer to put their own spin on prepared foods through options that can be customised at home and through made-to-order stations Exhibit 37: Please indicate your agreement with the following statements. (by age, top two box = agree and agree completely) % Overall 27% Key Finding: More than a quarter (27%) of consumers say they would prefer to customise prepared foods at home by adding their own ingredients, spices and condiments; consumers aged 25–34 (31%) and 35–44 (30%) are the most likely to strongly agree. A quarter of respondents (25%) say they would be more likely to purchase prepared foods at retail stores that offer made-to-order food stations where they can fully customise main dishes. More consumers aged 25–44 (40%) strongly agree that they are likely to purchase prepared items at retail stores that they can fully customise. More than a quarter of respondents aged 35–44 (28%) say the same. 25% Base: 664 (prefer) and 676 (more likely) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 46

Retailers may want to tout customisation options to gain share of foodservice occasions from restaurants Exhibit 38: Retail prepared foods allow for more customisation in my meal than food purchased from a restaurant. (by age and gender, top two box = agree and agree completely) % Overall = 30% Key Finding: Offering customisation options could give retailers an edge over restaurants by appealing to those who want to tailor their meals to their own tastes. Three in 10 respondents (30%) agree or completely agree that retail prepared foods allow for more customisation than food purchased from a restaurant. This is most likely because retail prepared foods are often offered in a made-to-order format or on a self-serve hot or cold food bar. Base: 652 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 47

Grab-and-go options are more appealing to consumers for retail foodservice than staffed or self-serve formats Exhibit 39: How appealing are the following serving formats for prepared foods? (by gender, top two box = appealing and extremely appealing) % Overall 52% 49% 40% 38% 37% Key Finding: More than half of respondents (52%) say grab-and-go is the retail foodservice format that most appeals to them. This format likely appeals to consumers with on-the-go lifestyles, offering convenience and speed. More females (56%) than males (48%) say the grab-and-go format is appealing or extremely appealing. 37% 30% Base: 1,000 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not appealing at all and 6 = extremely appealing 48

Mix-and-match prepared-food options that provide an element of customisation are significantly more appealing than full meals that have already been pre-packaged Exhibit 40: How appealing are the following serving formats for prepared foods? (by age, top two box = appealing and extremely appealing) % Overall 49% Key Finding: Nearly half of consumers (49%) find the option of choosing mix-and-match mealparts appealing or extremely appealing. Mix-and-match options offer consumers choices within a selection of menu items, allowing an element of customisation off of a standardised menu. Mix-and-match items may also be perceived to be fresher than pre-packaged meals. On the other hand, more than a third of respondents (36%) say items already packaged together as full meals are appealing. 36% Base: 1,000 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not appealing at all and 6 = extremely appealing 49

Twice as many consumers place a high importance on the availability of individual-size prepared-food options as on family-size options Exhibit 41: Please indicate how important the availability of _____ is in your decision to purchase a prepared item or meal from a retail store. (by age) % Overall 51% Key Finding: Half of respondents (51%) indicate that the availability of individual-size options is important or extremely important to them in their decision to purchase a prepared item or meal from retail foodservice. About a quarter of respondents (27%) say the availability of family-size options is important in their decision to purchase a prepared item or meal from a retail store. As we will see, consumers turn to retail foodservice more for solo meals than for meals with others. 27% Base: 1,000 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 50

Retailers may be able to boost incremental prepared-foods sales by offering kids’ options, especially items that appeal to children aged 12 and under Exhibit 42: How important is the availability of kids’ offerings when purchasing prepared foods from a retail store. (by household makeup, top two box = important and extremely important) % Overall 36% Key Finding: More than a third of respondents who live with children (36%) indicate that the availability of kids’ offerings is important in their decision to purchase a prepared item or meal from a retail store. Consumers who live with children aged 12 or under (41%) place greater importance on these options than those who live with children aged 13–17 (27%). Older children are more likely to eat and enjoy the same foods their parents do, while younger children typically prefer different options. Base: 307 consumers aged 18+ who live with children Respondents indicated their opinion on a scale of 1–6 where 1 = not important at all and 6 = extremely important 51

Ready-to-eat options are somewhat more appealing to consumers than items that are ready-to-heat, likely because ready-to-eat foods require less preparation Exhibit 43: How appealing are the following serving formats for prepared foods? (by age, top two box = appealing and extremely appealing) % Overall 63% Key Finding: Given the importance of speed and convenience in prepared-food purchases, it is no surprise that consumers prefer ready-to-eat items over ready-to-heat items. More than three-fifths of respondents (63%) indicate that items that are ready-to-eat are appealing. Ready-to-eat foods are most appealing to consumers aged 25–34 (75%) and those aged 45–54 (72%). 53% Base: 1,000 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = not appealing at all and 6 = extremely appealing 52

More than a third of respondents report that they often purchase chilled prepared foods, such as take-and-bake pizza to reheat at home Exhibit 44: The prepared meals I buy at retail stores often include “chilled” items that are packaged cold for reheating at home. (by age and gender, top two box = agree and agree completely) % Overall = 37% Key Finding: In addition to ready-to-eat foods, many foodservice retailers also offer some chilled prepared foods, such as take-and-bake pizza or soup packaged cold, that are ready to heat. Nearly four in 10 respondents (37%) say they often buy these types of foods at retail. These consumers are most likely looking for a quick and easy meal that they won’t have to preparing themselves. Base: 662 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 53

Retailers will want to strive to make ready-to-heat prepared-foods microwaveable; three out of five consumers prefer to reheat prepared items using the microwave Exhibit 45: If you purchase an item from the prepared foods section that needs to be reheated, how would you prefer to reheat the item? Key Finding: Throughout this report, we have seen that convenience is a primary driver for retail foodservice purchases. Therefore, it is no surprise that consumers prefer the fastest, easiest preparation method for options that need to be heated. Consumers overwhelmingly prefer to heat or reheat retail foodservice offerings using the microwave; more than three out of five consumers (63%) indicate that they like to reheat prepared items in the microwave. The remaining consumers primarily prefer to heat items in the oven (35%). Base: 1,000 consumers aged 18+ 54

A third of consumers agree that they would like more retail stores to offer options that do not need to be eaten immediately and that help them plan future meals Exhibit 46: Please indicate your agreement with the following statements. (by age, top two box = agree and agree completely) % Overall 32% Key Finding: One-third of consumers (32%) agree that they would like more retail stores to offer options that could help them plan for future meals, such as ready-to-heat items they could purchase for dinners throughout the week. A third of consumers (32%) also say they would like retail stores to offer more prepared meals that do not need to be eaten immediately. Retailers can leverage this interest by positioning more prepared foods as offerings consumers can stock up on to eat for future meals. 32% Base: 638 (future) and 673 (prepared) consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 55

Interest in restaurant-style family-sized options that could be purchased at retail stores to eat at home peaks among consumers aged 25–44 Exhibit 47: I would like more restaurants to offer family-sized options at retail stores that I can purchase to eat at home. (by age and gender, top two box = agree and agree completely) % Overall = 22% Key Finding: One in five consumers overall (22%) would like more restaurants to offer family-sized options at retail stores that they could purchase to eat at home, offering them the opportunity to bring home unique and craveable items that they cannot get anywhere else. Interest in home meal replacements is highest among respondents aged 25–44 (26%)—consumers who are most likely to live with children. This signals that retailers and manufacturers may want to make sure that offerings appeal to both adults and children. Base: 655 consumers aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely 56

Chinese concepts have the greatest opportunity to develop home-meal-replacement offerings, followed by chicken, pizza and Indian concepts Exhibit 48: Which items would you consider purchasing from restaurants as home meal replacements? Select all that apply. Key Finding: Consumers who indicated interest in home meal replacements from restaurants were further asked which restaurant-style items they would consider purchasing for home meals. More than half (56%) say they would purchase a Chinese dish. Chinese food is a highly shareable option that could easily be apportioned among family members, offering a variety of tastes for everyone. Chicken is another preferred item for at-home meal replacements. Base: 374 consumers aged 18+ who would like more restaurants to offer family-sized options to purchase to eat at home 57

Younger consumers were much more likely than their older counterparts to have made their last prepared-foods purchase at a convenience store or petrol station Exhibit 49: At what type of establishment did you make your purchase? (by age) % Overall 65% 18% Key Finding: Nearly all of consumers report that they visit a supermarket once a month more often. Thus, it’s no surprise that 65% of consumers made their most recent retail foodservice purchase at a supermarket. However, more than a quarter of consumers aged 18–24 (28%), compared to fewer than a fifth of all consumers (18%) visited a convenience store or petrol station on their last retail foodservice occasion. Younger consumers tend to have more fast-paced, on-the-go lifestyles, and also tend to be in need of lower price points, and these locations cater to both needs. 12% Base: 1,000 consumers aged 18+ 58

Data suggests that most prepared foods purchased at retail locations are planned in advance and are purchased for immediate consumption Exhibit 50: Was the food eaten immediately, and was it planned or an impulse purchase? Key Finding: Exhibit 50 indicates that most retail foodservice occasions are planned; three-fifths of consumers (59%) say their most recent retail foodservice purchase was planned. This leaves 41% whose last retail foodservice purchase was made on impulse. More than three-fifths of consumers (64%) report that their last retail foodservice purchase was eaten immediately or within one hour of purchase. Base: 1,000 consumers aged 18+ 59

More than three-fifths of respondents say they purchased prepared-foods for just themselves on their most recent retail foodservice occasion Exhibit 51: Who were you purchasing the meal for on this most recent occasion? Select all that apply. (by age) % Overall 62% 21% 17% 6% Key Finding: Technomic research shows that when consumers dine away from home, they typically dine with others. However, this is often not the case for prepared-food purchases from retailers. Three-fifths of consumers (62%) say that their most recent prepared meal or food item from a retailer was purchased just for themselves. Roughly seven out of 10 consumers aged 18–44 report purchasing the meal for themselves, while fewer than three-fifths of consumers over the age of 44 say the same. NA 3% 2% Base: 1,000 consumers aged 18+ 60

More consumers purchase prepared foods for lunch than for any other daypart, likely because convenience and fast service are crucial aspects of the lunch daypart Exhibit 52: Which of the following did you purchase? Select all that apply. Key Finding: Almost half of consumers (46%) report that they purchased prepared foods for lunch on their most recent retail foodservice occasion. Convenience tends to be crucial for the lunch daypart, since many consumers are on a short lunch break from work—underlining the fact that consumers often purchase retail foodservice for convenience. Although it is not shown, more than half of consumers aged 18–34 (56%), compared to 42% of those aged 35 and older, purchased prepared foods for lunch on their most recent occasion. Base: 1,000 consumers aged 18+ 61

Traditional breakfast options, such as breakfast meats or an English breakfast, are most appealing for retail foodservice breakfast occasions Exhibit 53: What type of food did you purchase for breakfast? Select all that apply. (by gender) % Overall 40% 31% 19% 15% 12% 12% Key Finding: Breakfast meat is by far the most frequently named retail foodservice breakfast item. Two-fifths (40%) of consumers who purchased breakfast on their last retail foodservice occasion included a breakfast meat in their purchase. Three out of 10 consumers whose most recent retail foodservice occasion involved breakfast (31%) report purchasing a traditional English breakfast. English breakfast is not highly portable, suggesting that consumers are looking for a hearty breakfast meal—rather than portability—when purchasing breakfast in a retail foodservice setting. 10% 10% 10% NA Base: 48 consumers aged 18+ who purchased breakfast on their most recent retail foodservice occasion 62

More women than men purchased healthy options, such as a fruit salad or yoghurt, on their most recent lunch or dinner retail foodservice occasion Exhibit 54: What type of food did you purchase for lunch or dinner? Select all that apply. (by gender) % Overall 32% 16% 10% 9% 8% 8% Key Finding: The most distinct gender difference in lunch or dinner retail purchases can be seen for sandwiches, with 36% of women, compared to 28% of men, reporting that their last retail foodservice purchase was a sandwich. Women also were more likely to report having purchased fruit salad, a savoury salad or yoghurt, likely because of their perceived healthy positioning. More men, on the other hand, purchased heartier or more indulgent options, such as chicken, pizza and baked pasta, on their most recent retail foodservice occasion. 7% 7% 6% 6% Base: 737 consumers aged 18+ who purchased lunch or dinner on their most recent retail foodservice occasion 63

Consumers primarily report purchasing handheld meal options on their most recent retail foodservice snacking occasion Exhibit 55: What type of food did you purchase as a snack? Select all that apply. (by gender) % Overall 39% 16% 11% 10% 10% 10% Key Finding: Consumers purchase a wide variety of items—sandwiches, desserts, breads and pizza—as snacks. More consumers name sandwiches than any other item as the food purchased on their most recent retail foodservice snack occasion; fully 39% purchased a sandwich on a bread or bun from a prepared-foods section for a snack. Sandwiches are handheld and portable options easy to consume on the go, making them prime snacking fare. Consumers were twice as likely to have purchased a sandwich than any other option on their most recent retail foodservice snacking occasion. 10% 8% 7% Base: 157 consumers aged 18+ who purchased a snack on their most recent retail foodservice occasion 64

Of those shopping for no meal in particular on their most recent retail foodservice occasion, more than a third purchased bread or chicken Exhibit 56: What type of food did you purchase? Select all that apply. Key Finding: Exhibit 56 shows that when consumers purchase prepared foods for no particular meal, they are most likely to purchase bread, chicken or pizza. Sandwiches are not even among the top 10 foods that consumers purchased for “no particular meal” on their most recent retail foodservice occasion. Consumers may instead be purchasing ingredients for a sandwich to make at home later; more than a third report purchasing bread (35%) or chicken (35%) on their most recent retail foodservice occasion that was for no meal in particular. Base: 37 consumers aged 18+ who purchased food for no particular meal on their most recent retail foodservice occasion 65

Among those who purchased prepared chicken on their last retail foodservice occasion, an overwhelming majority purchased rotisserie chicken Exhibit 57: What type of chicken did you purchase/how was it prepared? (by gender) % Overall 59% 11% 10% 8% 5% Key Finding: Previous exhibits showed that chicken is a leading retail foodservice option, whether consumers are visiting for lunch, dinner or no particular meal. Technomic asked consumers which type of chicken they purchased on any of these occasions. Rotisserie or roast chicken leads all other varieties by a wide margin, with three-fifths of consumers (59%) who bought chicken on their last retail foodservice occasion purchasing this type. 2% NA 2% Base: 133 consumers aged 18+ who purchased chicken on their most recent retail foodservice occasion 66

Potato-based options represent the majority of side items that consumers purchased on their last retail foodservice occasion Exhibit 58: What side item(s) did you purchase? Select all that apply. Key Finding: Consumers who purchased side items from prepared-foods sections for lunch, dinner or no particular meal were asked which side items they purchased. Several of the sides mentioned are potato-based options. Crisps are by far the top side item, purchased by six of the 17 consumers who purchased a side. That’s likely because they are an ideal accompaniment to sandwiches, the leading item purchased for lunch, dinner and snacks alike. Additionally, crisps are conveniently packaged in a portable format and come in a variety of flavours. Base: 17 consumers aged 18+ who purchased a side item on their most recent retail foodservice occasion Findings should be considered directional only due to a low base 67

Roughly twice as many consumers purchased cheesecake as any other dessert on their most recent retail foodservice occasion Exhibit 59: What did you purchase for dessert? Select all that apply. (by gender) % Overall 33% 17% 17% 13% 13% 13% Key Finding: A third of consumers who purchased dessert (33%) say that they bought cheesecake—roughly twice as many consumers as those who purchased any other dessert. In addition, a sixth of consumers report purchasing a doughnut or éclair (17%) or an ice-cream dessert (17%), and 13% chose a cake or torte. Nearly two-fifths of women (38%), compared to only a quarter of men (25%), purchased cheesecake on their most recent retail foodservice occasion. More women than men also purchased a doughnut or éclair. However, a quarter of men (25%) purchased an ice-cream dessert, compared to 12% of women. 12% 12% Base: 52 consumers aged 18+ who purchased dessert on their most recent retail foodservice occasion 68

Two of the top three beverages consumers purchased on their most recent retail foodservice occasion were bottled, perhaps due to convenience factors Exhibit 60: What type of beverage did you purchase? Select all that apply. (by gender) % Overall 41% 25% 14% 14% 13% 11% 8% Key Finding: Consumers who purchased a beverage on their most recent retail foodservice occasion were most likely to have purchased a bottled soft drink, perhaps due to the convenience of having a beverage with a secure lid that they can easily take to-go. Two-fifths of consumers (41%) report purchasing a bottled soft drink. Additionally, a quarter of consumers (25%) say they purchased coffee or speciality coffee. 7% 5% 3% 2% Base: 133 consumers aged 18+ who purchased a beverage on their most recent retail foodservice occasion 69

More consumers purchased retail beverages than foodservice beverages on their most recent retail foodservice occasion Exhibit 61: Which of the following best describes the beverage you purchased? (by gender) % Overall 38% 38% Key Finding: On their most recent retail foodservice occasion, more consumers purchased a pre-packaged beverage (59%) than a freshly prepared beverage (38%). However, it seems that the beverage was most likely picked up from the prepared-foods section, even if it came in a bottle or can. Nearly two-fifths of consumers purchased a beverage from the prepared-foods section (38%), and another fifth (21%) picked up a bottled or canned retail beverage from the prepared-foods area. Operators offer retail beverages in their foodservice areas in order to make purchases more convenient for customers and boost their overall sales. 21% Base: 133 consumers aged 18+ who purchased a beverage on their most recent retail foodservice occasion 3% of consumers reported “not sure/none of the above” 70

More than half of consumers cite convenience and value factors as reasons for purchasing prepared foods on their most recent occasion Exhibit 62: What are the top reasons you purchased a prepared meal from a supermarket or other retail store on this most recent occasion? Please choose up to FIVE responses. (by gender) % Overall 56% 52% 32% 26% 26% Key Finding: Technomic research generally finds that convenience is an important factor in foodservice purchasing decisions. Therefore, it is no surprise that convenience factors are the leading reasons consumers cite for purchasing prepared foods; more than half of consumers chose retail foodservice on their most recent occasion because it was a fast and easy meal solution (56%) and/or convenient (52%). 25% 24% 18% 16% Base: 1,000 consumers aged 18+ 71

In-store marketing is most likely to boost incremental traffic and sales among younger consumers
Exhibit 63: Did any of the following factor into your decision to purchase prepared foods on this occasion? Select all that apply. (by age) % Overall 28% 12% 6% Key Finding: Exhibit 63 shows that each marketing technique exerted more influence over younger consumers’ most recent retail foodservice purchase. In fact, 44% of consumers aged 18–24 say the location of the prepared-foods area factored into their decision, while only 23% of consumers aged 55 and older say the same. Furthermore, 17% of those aged 18–34, compared to 12% of all consumers, were influenced by the aroma of the prepared-foods section. Younger consumers may be more impressionable and more apt to rely on sensory stimulation, such as visual appeal and aroma, when making retail foodservice purchasing decisions. 4% 3% NA Base: 1,000 consumers aged % of consumers reported “none of the above factored into my decision” 72

Consumers say that supermarkets and LSRs are on par for most attributes relating to the food, but that supermarkets offer better prices, value and healthy options Exhibit 64: How would you compare prepared foods at traditional supermarkets to limited-service restaurants on the following attributes? Key Finding: Consumers think supermarkets and LSRs are similar with respect to their food offerings. More than half of supermarket customers rate supermarkets and LSRs equally for factors relating to the freshness, quality, taste and appearance of food. However, a majority of consumers who purchase prepared foods at traditional supermarkets rate these locations as better than LSRs for most concept attributes listed in Exhibit 64. Supermarkets particularly excel at price, with two-thirds of consumers (68%) saying supermarkets outpace LSRs for price. Furthermore, consumers say that supermarkets generally outshine LSRs for overall value and convenience. Base: 494 consumers aged 18+ who purchase retail foodservice at traditional supermarkets at least once a month

To compete with full-service restaurants, supermarkets can leverage price, value, convenience and health Exhibit 65: How would you compare prepared foods at traditional supermarkets to full-service restaurants on the following attributes? Key Finding: Consumers say supermarkets best FSRs on price, overall value and convenience. Three-quarters (76%) think that traditional supermarkets offer better prices than FSRs. In addition, roughly three-fifths of consumers believe that traditional supermarkets offer a better value (62%) and more convenience (57%). Many consumers think traditional supermarkets and full-service restaurants are similar in terms of food attributes. The largest proportion of consumers report that supermarkets and FSRs offer food that is similar in quality (64%), freshness (57%), taste (53%) and appearance (46%). Base: 422 consumers aged 18+ who purchase retail foodservice at traditional supermarkets at least once a month

Most consumers say the quality, freshness, taste and appearance of food offerings are the same for high-street retailers and limited-service concepts Exhibit 66: How would you compare prepared foods at high-street retailers to limited-service restaurants on the following attributes? Key Finding: Most of the consumers who purchase prepared foods at high-street retailers rate these locations as better than LSRs at providing nutritional information of their offerings (58%) and offering healthy food options (51%). High-street retailers also excel at overall value and price. Consumers believe that high-street retailers and LSRs are most similar in terms of food attributes. More than half of high-street retailer foodservice consumers rate these locations and limited-service restaurants equally for the taste (57%), freshness (55%), quality (53%) and appearance (51%) of their food offerings. Base: 295 consumers aged 18+ who purchase retail foodservice at high-street retailers at least once a month

High-street retailers beat FSRs for concept attributes such as price, overall convenience and value, but retailers may want to consider improving their foods Exhibit 67: How would you compare prepared foods at high-street retailers to full-service restaurants on the following attributes? Key Finding: Exhibit 66 showed that health, price, value and convenience are seen as strong advantages of high-street retailers’ foodservice compared to LSRs. Exhibit 67 shows that this is also the case when these retailers’ foodservice sections are compared to full-service restaurants. While a substantial proportion of consumers of high-street retailer foodservice think FSRs do a better job with their food offerings, most consumers think that high-street retailers and FSRs offer food that is similar in quality (61%), freshness (53%), and taste (52%). Base: 258 consumers aged 18+ who purchase retail foodservice at high-street retailers at least once a month

Convenience stores have an advantage over LSRs when it comes to the price and value of prepared foods; c-stores also do a better job of offering healthy options Exhibit 68: How would you compare prepared foods at convenience stores, co-ops, news agents or petrol stations to limited-service restaurants on the following attributes? Key Finding: Three out of five consumers who purchase prepared foods at convenience stores (60%) say that convenience-store foodservice prices are better than prices offered at limited-service restaurants. Half (50%) also say that convenience stores or petrol stations offer a better overall value than LSRs. In fact, consumers did not see LSRs as outpacing convenience stores for any concept attribute measured. Base: 332 consumers aged 18+ who purchase retail foodservice at convenience stores, co-ops, news agents or petrol stations at least once a month

Consumers rate FSRs and convenience stores about the same for the freshness, quality, taste and variety of food offerings Exhibit 69: How would you compare prepared foods at convenience stores, co-ops, news agents or petrol stations to full-service restaurants on the following attributes? Key Finding: Convenience is by definition a key factor for conveniences stores, news agents and petrol stations. It is not surprising that half of consumers (53%) think the overall convenience offered by c-store foodservice outpaces the convenience factor at FSRs. Consumers tend to see FSRs and convenience stores as similar with respect to the freshness (54%), quality (53%), taste (47%) and variety (41%) of the prepared foods they offer. However, consumers think that full-service restaurants do a better job regarding the appearance of the food (46%) and in offering more in the way of healthy options (42%). Base: 281 consumers aged 18+ who purchase retail foodservice at convenience stores, co-ops, news agents or petrol stations at least once a month

Outlook: Trends to Watch

Outlook: Trends to Watch
The Outlook: Trends to Watch section of this report spotlights the consumer, menu and concept-positioning trends that are impacting the retail foodservice category today. Understanding the trends that are emerging in this sector can help both operators and suppliers uncover new growth opportunities. The following topics are discussed in this section: Expanded Retail Foodservice Offerings—Consumers want supermarkets and other retail outlets to offer a wider variety of new or unique prepared-food options. Innovative versus Traditional—Consumers hunger for trendy foods and flavours, yet also crave the familiar. The most innovative retailers are able to carve out a niche that satisfies a broad base of retail foodservice consumer preferences. In-Store Foodservice: Supermarket Restaurants—In-store dining concepts in revamped supermarkets and other retail outlets can make a retailer a viable eating-out destination choice for consumers.

Glossary of Foodservice Terminology

Glossary of Foodservice Terminology
This comprehensive glossary of U.S. foodservice industry terminology is designed to define and clarify frequently used terms for U.K. readers. This glossary includes definitions of the various restaurant and retail categories as well as other terms used in Technomic’s consumer trend reports. Away from Home (AFH): Refers to occasions occurring outside of the home or food that is prepared and purchased at restaurants or other foodservice locations. At Home (AH): Refers to occasions occurring inside of the home or food that is prepared at home. Casual Dining Restaurant (CDR): A sub segment of Full Service. Establishments have table service, full bar service and focus on the lunch and dinner day parts. Cheque averages are generally £10-£ Examples include Vintage Inns, Ember Inns and Frankie and Benny’s. Chain Restaurant: Foodservice outlets with several units that share a brand and central management, and usually have standardised business methods and practices. Convenience Stores (C-Stores): A small store or shop that may sell items such as lottery tickets, cigarettes and retail and foodservice food and beverage. Foodservice in convenience stores includes ready to eat or ready to heat prepared food items such as hot dogs and sandwiches. Prepared beverages typically include fresh-brewed coffee and dispensed soft drinks and coffee beverages. Because many convenience stores also sell gasoline and these stores are sometimes referred to or grouped with gas stations. Similar to news agents/petrol stations in the U.K. Convenient Meal Solutions (CMS): Commercially prepared meals and components that reduce/eliminate the need for preparation. Includes Home Meal Replacements (HMR) and Retail Meal Solutions (RMS). Daypart: Refers to the meal occasion—generally breakfast, lunch or dinner.

Glossary of Foodservice Terminology (cont.)
Family Style: Family style cuisine has menu diversity with many options for traditional vs. contemporary dishes, various protein and non-protein meal solutions and full course offerings (starters, soups, salads, main dishes, and dessert) creates menu options. Commonly, they offer breakfast, lunch and dinner and many now offer late-night and even 24-hour service. Restaurants specialising in Family Style cuisines are typically Mid Scale restaurants, a sub segment of Full Service and are often called Family Style restaurants. Fast-Casual Restaurants (FCR): A sub segment of Limited Service that can include several types of restaurants (sandwich, etc.). Establishments with a limited-service or self-service format; cheque averages generally above £8, food prepared to order, fresh (or perceived as fresh) ingredients, innovative food suited to sophisticated tastes, and upscale or highly developed interior design. Alcohol may be served. Examples include Nando’s and Prêt a Manger. Fine Dining Restaurant: A sub segment of Full Service. Establishments have a dinner emphasis and cheque averages over £40. Examples include Nobu. Foodservice Industry: Includes all establishments, types of businesses and services that prepare and generally serve food, meals, snacks and beverages away from home. Full Service Restaurants (FSRs): Establishments with a relatively broad menu along with table-, counter-, and/or booth service and a wait staff. These establishments offer meals and snacks for immediate consumption primarily on-premise, though they may also offer takeaway service. This segment is composed of midscale and casual-dining restaurants, a newer upscale-casual sub segment and fine-dining concepts. Grab and go: Foodservice options offered at restaurants or retail stores that are ready-to-heat or ready-to-eat. Home Meal Replacement (HMR): A subcategory of Convenient Meal Solutions (CMS), including only those dinner day part foods which are prepared away from home and consumed at home. This would include options offered at retail stores and restaurants.

Limited Service Restaurant (LSR): Establishments whose patrons generally order or select items and pay before eating, with cheque averages generally £4.25–£12. Food and drink may be consumed on-premise, taken out, or delivered to customers’ locations. This segment consists of traditional and quick-service operations, the fast-casual sub segment, and cafeterias/buffets. Limited Time Only (LTO): Seasonal or special menu items offered that are not part of the permanent menu. Meal Part: Refers to the different parts of a meal or sections of a menu such as starter, main course, beverage, etc. Mid-Scale Restaurant (MSR): A sub segment of Full Service. Typically offers table service but limited/no alcohol service and often serves family-style cuisine. Next 250 Chains (U.S.): Top chain restaurants in the most recent time period determined by revenue. Non Traditional Locations: “Non traditional locations” is the term used to refer to units of restaurant chains placed at locations that are not separate eating place establishments. This includes units located in a host establishment such as a hospital, college, school, etc. Often non traditional units take the form of a kiosk, cart or other modified form of the “standard” chain unit. Pubs (PUB): A sub segment of Full Service. Establishments offer a strong alcohol focus; moderate cheque averages without alcohol generally £7.50-£12. Examples include Wetherspoon, Greene King. Quick Service Restaurants (QSR): Establishments that offer a relatively limited menu of prepared foods or beverages for consumption on or off-premise where additional preparation is not necessary. Patrons generally order or select items and pay before eating. A sub-set of LSR, average cheque is under £4.50. Examples include McDonald’s, KFC. Retailer Meal Solutions (RMS): Ready-to-eat or ready-to-heat food products found in a retail store. Key categories include sandwiches/wraps, value-added meats, starters, prepared main course, prepared salads, sauces, pizza, pasta, dips, soups, spreads and sweet goods. Hot and cold dispensed beverages also fall under our definition of retailer meal solutions; frozen prepared foods do not.

Supermarket: Retail store offering a full line of groceries, meat and produce. Supermarket Foodservice: Fully prepared foods/beverage products usually for immediate consumption sold through in-store supermarket delis and food bars, and from restaurants located within supermarkets. Supermarket Deli foodservice encompasses all prepared, ready-to-eat (ready-to-drink) products from the deli department but excludes bulk or unfinished items, e.g., meats, cheeses, assembled but uncooked pizzas. The types of deli products classified as foodservice include: beverages, desserts, fresh salads, fried/BBQ chicken, BBQ ribs, hot prepared main dishes, sandwiches, yoghurt, tacos, soup and other self-service bars, etc.” Additionally, restaurants, food bars and kiosks operating within the store are classified as supermarket foodservice. Top 250 Chains (U.S.)—The Top 250 U.S. chain restaurants in the most recent time period determined by revenue. Top 150 Chains (U.K.)—The Top 150 U.K. chain restaurants in the most recent time period determined by revenue. Top 500 Chains (U.S.)—The Top 500 U.S. chain restaurants in the most recent time period determined by revenue. Top Independents—Top 100 independent (non-chain) restaurants in the most recent time period, as determined by revenue. Varied Menu: A sub segment of Full Service. Establishments feature a broad-based menu of trendy items that are pulled from a variety of cuisines. Examples include Vintage Inns, Ember Inns. Warehouse Store: Low-margin grocery store offering reduced variety, lower service levels, minimal décor, and a streamlined merchandising presentation along with aggressive pricing. Wholesale Club: Membership retail/wholesale hybrid with a varied selection and limited variety of products presented in a warehouse-type atmosphere. These 90,000+ square-foot stores sell products in either large or bulk quantities, including grocery items such as bottled water, fruit, sauces and seasonings. Examples include Costco and Tesco Extra.

Consumer Demographics

Age Exhibit C-1 Base: 1,000 consumers aged 18+

Gender Exhibit C-2 Base: 1,000 consumers aged 18+

Ethnicity Exhibit C-3 Base: 1,000 consumers aged 18+

Region Exhibit C-4 Base: 1,000 consumers aged 18+

Income Exhibit C-5 Base: 1,000 consumers aged 18+

The U.K. Retail Foodservice

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The U.K. Retail Foodservice

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