The Rockwellian world of a family sitting down to dinner each evening to enjoy a meal that Mom makes from scratch is going the way of the $2 gallon of gas. More consumers are eschewing the traditional home-cooked meal in favor of take-out and other convenient eating options as busy work schedules and other time pressures leave less time for food preparation.

The switch to so-called ready-to-eat and heat-and-serve offerings is becoming increasingly frequent as more merchandisers give greater emphasis to the sector by launching new dining concepts while enhancing the quality and variety of products.

Many supermarket delis, for instance, are evolving into mini food courts with stations that provide such items as grilled beef and chicken, hot pizza, made-to-order subs and rotisserie meats, along with hot buffets and expansive salad bars.

Major suppliers, meanwhile, such as Hormel Foods Corp. and Tyson Foods Inc., are rolling out added lines of refrigerated meals containing pre-cooked entrées and side dishes that only require quick heating in the oven or microwave.

The NPD Group, a Port Washington, N.Y.-based market research firm, reports that about 60 percent of the main dishes served in American homes are made from scratch, down from approximately 75 percent in 1984.

Retailers that are slow to offer shoppers more convenient meal alternatives will be losers in the battle among supermarkets, fast-food and fast-causal restaurants and other foodservice outlets for “share of stomach,” analysts say.

“Convenience is an important channel,” says Harry Balzer, NPD Group vice president. “It has been gaining strength for the last 15 years after Boston Market revealed there was a place for home meal replacement. Manu­facturers began capitalizing on that sector and supermarkets also started taking steps to become competitive with the restaurant industry.”

Indeed, he says that the growth in restaurant take-out business has leveled off in recent years as more supermarkets embraced convenient meals.

“The supermarket is a novel place to get pre-made food and is a less expensive option than eating out in a restaurant,” he says. “Americans already are visiting restaurants at suppertime less than they did five years ago. It coincides with the trend of more supermarkets offering ready-to-eat meals that can be consumed at home. Whole Foods showed that stores can be food operations and not just supermarkets.”

Balzer and other analysts cite Austin, Texas-based Whole Foods Market Inc. as a major catalyst in spurring consumers to seek ready-to-eat and heat-and-serve options from supermarkets.

The largest merchandiser of natural and organic proteins, Whole Foods has revolutionized grocery take-out with its vast selections of restaurant-quality prepared entrées in the full-service deli case and wide arrays of hot and cold food stations.

One of Whole Foods’ newest stores on Chicago’s Northwest side, for instance, features a plethora of options aimed at the convenience-oriented sector, including a beer and brat station, made-to-order sushi, hot seafood soups, brick oven pizza, hot sandwich grill, Asian meals and a hot bar with more than two-dozen choices.

“Even ignoring the natural and organic aspect, Whole Foods knows how to make things that are good for you,” says Jim Wisner, president of Wisner Marketing Group Inc., a Libertyville, Ill.-based consumer research and marketing consulting organization. “There is a lot more exposure and awareness of their offerings as they expand, and that is spurring conventional supermarkets to also fill the (convenience) niche.”

Balzer adds that more Americans just want to eat and have others handle cooking, purchasing, storage and cleanup. He notes that the only element likely to slow the trend is economics.

“The convenience market is based on our two most important investments: time and money,” Balzer states. “For it to expand, the wealth of America has to continue, or the manufacturer has to make it less expensive to purchase foods.”

Yet, demand for convenience products shows no signs of slowing. Helping to fuel interest is the changing demographics of U.S. households.

As more aging baby boomers become empty nesters—with fewer mouths to feed and a stronger interest in healthy and tasty eating—it becomes more economically viable and easier for them to purchase pre-cooked meals.

Take-out typically is less expensive and time-consuming than visiting sit-down restaurants. Buying specific foods in a modular form also enables different family members to consume their preferred meals at their leisure, Wisner says.

More retailers, meanwhile—after years of trial and error—are learning the most effective ways of merchandising convenience meals.

“Eight years ago—when ‘home meal replacement’ was the buzz word—retailers just threw things in the case that shoppers could take home and easily prepare, even if the items were not what the customers wanted,” Wisner says. “But there has been a shakeout period where merchandisers learned what works and what doesn’t.”

Many operators also are emulating the most successful marketers of convenience foods, including Rochester, N.Y.-based Wegmans Food Markets Inc. and Richmond, Va.-based Ukrop’s Super Markets Inc.

Wegmans operates a plethora of take-out stations at its 70 stores in New York, New Jersey, Pennsylvania, Virginia and Maryland, including a pizza shop, sub shop, hot case, hot made-to-order grill, hot Asian buffet, Indian food buffet and fresh food bar. Some locations also have a Seafood Bar and Veggie Bar with counters for in-store eating or take-out.

Ukrop’s, with 25 stores in central Virginia, has hot grills, pizza and sandwich stations, hot breakfast buffets and large ready-to-eat and heat-and-serve sections.

Prepared Refrigerated Dinner/Entrées Sales
Brand	Dollar sales	Percent Change vs. Year Ago	Unit sales	Percent Change vs. Year ago
Total	$142,483,200	-4.74%	70,369,650	-6.11%
Hormel Dinty Moore	40,507,060	-9.88	17,238,110	-13.30
Hormel Mary Kitchen	27,766,090	0.52	13,058,720	-2.27
Private Label	17,870,730	-3.58	10,062,780	-2.55
Castleberry	10,430,780	-5.42	6,534,385	-2.89
Armour	9,723,311	-7.22	5,978,450	-9.02
Libby	7,770,807	-10.12	3,542,684	-11.19
Sweet Sue	6,770,225	5.37	2,627,205	8.23
Swanson	4,571,906	-5.46	2,867,592	-5.94
Tasty Bite	2,984,338	33.47	909,577	30.41
Mrs. Fearnow	2,229,367	-6.22	726,116	-9.25
Austex	1,589,920	-12.32	1,137,743	-12.68
Broadcast	1,218,244	-16.03	630,047	-18.55
Podravka	1,095,760	-11.41	298,440	-16.83
Prudence	1,057,976	32.57	873,841	43.73
Lucks	872,637	-10.13	570,861	-11.75
Source: Information Resources Inc. Figures are from supermarkets, drug stores and mass-merchandise outlets, excluding Wal-Mart Stores Inc., for the 52-week period ending 8/12/07.

Hertfordshire, U.K.-based Tesco PLC, the United Kingdom’s largest retailer and one of the most prominent merchandisers of prepared foods, ready-to-eat meals and ready-to-cook offerings, will further illuminate the sector when it opens its first U.S. stores this year.

Other factors likely to fuel convenience category growth include the construction of supermarkets that have ample space to offer large selections of pre-cooked meals. Many older outlets must create areas for added perishables by encroaching on the center store.

There also is greater interest by retailers in creating company-operated commissaries that enable all stores in a chain to get wide selections of fresh foods daily from a central location.

Ukrop’s and Tesco already leverage such systems and others are likely to follow suit, Wisner states. “That will expand the range of products and enable chains to offer items with more consistent quality,” he says. “We’re in the very early stages of that trend, but it will be around for long time.”

As will the demand for ready-to-eat and ready-to-heat meals, analysts say.

“The whole approach will get more sophisticated and it’s the direction that supermarkets will have to go for the long haul to remain competitive for ‘share of stomach,’” Wisner notes.

Creating efficient programs for offering fresh convenient foods, however, can be daunting.

In addition to investing in new refrigeration systems and other technologies is the need to develop monitoring procedures to ensure that food quality is maintained. Operators also must control the higher levels of shrink that are common to prepared foods initiatives.

“The traditional supermarket mentality of buying and selling things which others make is a different direction than running a deli and getting into food preparation,” Wisner says. “There is a need in prepared foods for chefs and other people with culinary abilities and specific skill sets.”

It also is crucial for retailers—including those with sophisticated convenience food operations—to implement merchandising strategies that are designed to distinguish their offerings from those of competitors. Elements can include the marketing of “signature” items and the staging of product samplings, analysts say.

“The supermarket has to be different to be successful,” says W. Frank Dell, president of Dellmart & Co., a Stamford, Conn.-based retail consultancy. “And the competitive edge can be in their marketing of prepared and semi-prepared meals.”

Dell agrees that shopper interest in convenience meals will keep expanding, spurred in part by the younger generation’s general lack of cooking skills. Yet many other customer segments also are willing to pay more to make eating simpler, he says.

“The single most important driver is the habit of many shoppers to decide between four and six in the afternoon what they will have for dinner that night,” Dell notes. “The American consumer is increasingly resembling the European shopper and buying dinner on the way home from work. They want it ready-to-eat or ready-to-heat.”

Many European stores—particularly supermarkets in the United Kingdom—have multiple aisles filled with heat-and-eat proteins, along with extensive selections of grab-and-go sandwiches and prepared meals at full-service deli counters.

The stimuli for offering the items are similar to the catalysts in the U.S. They include shoppers who are too busy to cook and competition from other food outlets.

“There is strong competition among retailers in selling hot foods, but we’re also competing with the fast-casual restaurants” for the convenience-minded shopper, says Faye Greenburg, vice president of bakery and deli for Minyard Food Stores Inc., a Coppell, Texas-based operator of about 70 supermarkets that operate under the Carnival, Minyard and Sack ‘N Save banners.

Many of the company’s locations have hot-food stations that offer entrées, vegetables and starches, and Minyard is enhancing the take-out programs in some outlets. The company, for instance, is remodeling and adding a larger kitchen to a Carnival store in Dallas to generate more prepared foods business, Greenberg notes.

The Hispanic-oriented outlet will have a larger selection of fried and cooked foods, including chicken, sausage and roast beef, along with an “Asian Kitchen” that will cater to international customers, she says.

“We’re looking at how to better service the shopper in order to get repeat sales,” she notes. “That’s necessary because the competition is fierce.”

Indeed, Bill Bishop, chairman of Willard Bishop LLC, a Barrington, Ill.-based retail consultancy, agrees that supermarkets are vying with restaurants and other food outlets for the same customers, but stresses that grocers should focus on the needs of the consumer—and not the actions of competitors—in designing strategies.

“If I look at the competition I miss where the shopper is going, particularly if the competition isn’t following the consumer correctly,” he notes.

Bishop says shoppers are seeking assistance in speeding up the preparation of meals, particularly because many persons lack the skills or knowledge to create specific dishes.

“Supermarket operators are picking up on this and hiring people—including chefs and managers—from restaurants,” he states. “Different demands are being put on retailers to meet consumers’ quality, variety and price requirements.”

The biggest challenges facing merchants are producing items cost-effectively, managing shrink and establishing a reputation for excellence in order to become a destination, he notes.

Wisner states that such tactics as stocking grab-and-go sections with bags containing sandwiches and side items, or creating deli drive-through windows, will better enable supermarkets to stand apart from restaurants.

“The industry has not explored ways to create an experience that is different from foodservice,” he states. “Retailers need to look at marketing themselves as a concept and not an add-on to what they are doing. Business when they do that will take off.”