After years of inflation affecting America’s consumers, food retailers began to react in 2024 with efforts to win back customers. Using what was learned in several experiments, here’s what we can expect in the year ahead.

Changes in shopper behaviors have left retailers reeling. Price increases saw supermarket shoppers increase their visits to stores but with a smaller market basket. Noteworthy increases in commodities, such as eggs and milk created such a tumult, political observers say grocery prices played a key role in a Republican victory at the polls. Supermarket retailers benefited by growth in their own private label items that stole share from national brands.

Yet, Circana reports that even retailers that positioned themselves on “value” saw their own traffic slip toward fast-growing retailers such as Aldi, club stores, and even Dollar General. At the heart of the challenge is the chasm of the haves and the have nots with the most glaring example among full-service restaurants. 

Traffic to restaurants rose among high income families and down equally among low income families with 51% in the middle.

2024 saw a tremendous drop in traffic to restaurants as inflated prices drove consumers back to  eating at home. Bottomline, a dinner out costs 4.3X more than cooking dinner at home.

A widening gap in dining out vs. eating at home saw a dramatic drop in restaurant traffic.

CEOs at restaurant chains responded by launching bar bell value meal campaigns, offering both low-cost deals along with premium menu items for high income customers. On average, chains that did not offer some form of deal see a 3% drop in traffic, Those that offered a deal saw a 2% increase in traffic.

So What Food Retailers Should Do?

Data indicates that the shopper’s perception of “value” depends on your wallet. Yet, even lower income families are willing to splurge if there is a unique experience awaiting a visit to the retailer. For example, venues that offered both food and a game-like experience (we call it eatertainment) saw a 21% jump in locations last year. 

The Conference Board polled consumers last year and found that 81% of consumers just wanted to look forward to a memorable occasion. Here is the opportunity to redefine “value”.

Supermarket retailers need to look at their shopping experience to add value as well as promote deals on food items. More food sampling opportunities, quick and easy meal bundle demonstrations, healthy treats for kids in tow and increased promotions on supermarket deli ready-to-eat promotions are just a few ideas that add “value”.

For restaurants, the yearning by consumers to look forward to a unique experience can mean a focus on hospitality. The welcome at the door, meal prep at the table, happy hour promotions for those who have returned to the workplace and forms of games within the restaurant are all opportunities to make their dining experience memorable.

There are some encouraging signs of slowed inflation and better times ahead. Traffic to restaurants began to rebound in late 2024. Truth is in the numbers. Circana, who monitors and projects future trends among both supermarkets and foodservice, sees growth.

Circana projections of case purchases from manufacturers through 2027.

Case purchases of food products are projected to rise slightly more for foodservice operators than supermarkets through 2027. Lodging and casinos as well as the transportation segments point to even greater in the two years ahead.

Take a look at the value you offer today’s shoppers. There are clear indications that a bit more value doesn’t necessarily mean just price.