CHICAGO—Dinners at home peaked during the COVID-19 pandemic and although the percentage of consumers who are doing home cooking has leveled off, it is still greater than it was pre-pandemic, according to a new report by The NPD Group. In fact, NPD forecasts that in-home dinners will remain at a heightened level through 2024 due to inflation and rising costs forcing customers to pinch pennies where they can.

"More dinner meals at home are here to stay. The shifting population life stages and economic situation will create greater reliance on dinner at home," said Darren Seifer, NPD food and beverage industry analyst. "Consumers across all ages will look for breaks from routine, like making the same dishes out of habit. Food manufacturers and retailers can help consumers with dinner prep fatigue with convenient new foods and dishes that fit various cooking skill sets and needs. Value will also be top-of-mind with consumers during this time of high inflation."

Consumers will look for convenience when preparing dinner, said the report, as they have resumed their busy lifestyles. Little or no prep and fast dinner fixes, like frozen meals and ready-to-eat snacks, especially during the work week, will grow through 2024.

Consumers will also increasingly turn to retail on-the-go meals to help with meal prep, according to NPD Group, which is forecasting retail ready-to-eat foods by double-digits through 2024. Restaurant meals eaten at home are also forecast to grow.

However, consumers who eat their dinners at home aren’t saving as much as they used to. Food-at-home prices are up close to 12% year over year, reports Food Dive, which is the largest 12-month increase in 43 years.

More than 70% of manufacturers plan to increase their list price in the second half of 2022, and more than 60% of retailers plan to pass nearly all of those increases on to shoppers, according to Advantage Solutions’ June Sales Outlook. The list-price hikes are planned even as nearly 60% of manufacturers report they’ve experienced unit volume declines over the past six months as they’ve increased list prices. One in five manufacturers has experienced unit volume declines of 6% or more.

Food Dive reports that there are signs that consumers are reacting to increased food costs in small but significant ways. According to Josh McCann, head of HQ client delivery and analytics at Symphony RetailAI, price-sensitive consumers are shopping at different retailers and are buying different products.

“The most price-sensitive consumers—approximately one-third of all shoppers—are turning their back on the products they have been loyal to and have traditionally purchased,” said McCann in an interview with Food Dive. “As a result, if price-sensitive shoppers can find a cost-effective alternative to a brand they typically buy, they will switch to that more affordable product.”

Those more affordable products could be a smaller size, a less expensive brand, a private-label alternative, and it’s happening as these customers are shifting to other retailers.

McCann says that mainstream grocery stores are losing price-sensitive customers faster than they can replace them.

“For CPGs, this is a significant trend to pay attention to as many of the top-performing discount retailers help keep prices low by leveraging their private-label brands,” he said.

Dollar stores are seeing more customer visits, including many first-time shoppers to the channel, and they have expanded their offerings by widening their product selection to grab the wallet of convenience, grocery and pharmacy customers. Dollar General announced that all of its 18,000+ locations now offer healthy food options, including assorted dairy items, frozen vegetables, proteins, canned fruits and vegetables and grains.

Not unlike many convenience retailers, Dollar General been increasing its private-label lines. Historically, private-label brands thrive during inflation rises and economic uncertainty. During high inflation in the 1970s, private labels grew more prominent as cost-effective substitutes to name-brand products, and in 2008, store-label brands excelled, according to a 2008 New York Times article.

In the convenience channel, private-label sales climbed 17.8% in 2021 year over year, outpacing national brands, which only saw 4% sales growth, according to NACS State of the Industry data.

Read more about private label performance in c-store in NACS Magazine’s June SOI Summit issue.