Recent consumer research indicates that spending on fast food has decreased this summer compared to the previous year, though consumers are opting for smaller treats from supermarkets. According to data from Worldpanel by Numerator, casual and fast-food restaurants experienced a 6% decline in customer visits over the three months leading up to mid-July, when compared to the same timeframe last summer.
Despite this drop in dining out, shoppers are still purchasing branded grocery items rather than switching to more affordable, own-brand alternatives. Worldpanel noted a slight decline in grocery price inflation from July to August, yet consumers continue to seek cost savings in light of rising prices for everyday essentials.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, remarked that high grocery prices are influencing spending habits in other retail sectors, particularly in dining. He indicated that the decrease in foot traffic at casual and fast-service restaurants aligns with these financial shifts.
Interestingly, coffee shops appear to be an exception to this trend, as McKevitt observed that consumers are still inclined to treat themselves to in-store purchases. Furthermore, sales of branded grocery items rose by 6.1% in August, while own-label sales increased by 4.1%. This trend reflects the largest disparity favoring branded products since March 2024.
Sarah Coles, head of personal finance at Hargreaves Lansdown, pointed out that eating out is often one of the first expenses people cut when they look to save money. However, she highlighted a growing trend of consumers finding more affordable ways to indulge, like buying takeaway coffees or sweet treats from supermarkets, rather than dining out. Many consumers are choosing to invest in branded products while avoiding the expense of restaurant meals.
The Worldpanel report also noted a 5% grocery price inflation rate in August, a slight decrease from 5.2% in July. Within this context, the prices of chocolate, fresh meat, and coffee have seen significant increases, whereas champagne and dog food prices have decreased.
Source: https://www.bbc.com/news/articles/c5y042g11yvo?at_medium=RSS&at_campaign=rss