Consumers Are Choosing Frozen Pizza Over Restaurants, Survey Finds

A years-long chaos carnival of food inflation has changed everyday reality for millions of U.S. consumers, starting with their grocery shopping habits. A Reddit thread from three months ago asked users what grocery items they've been skipping altogether due to rising food inflation, and the most liked response involved a popular brand of frozen pizzas. "I used to love DiGiornos when they were $5," reads the comment, which over 150 users upvoted. "Now they're about $8-$10." But, lately, it looks like the tides have been shifting. According to recently released data from the U.S. Bureau of Labor Statistics, restaurant prices have climbed even higher than grocery prices in the past year. "Food away from home" is 8.8% more expensive than at this time in 2022, while "food at home" costs are 8.4% higher. It's becoming more appealing to stay in for dinner in America, and the push might have already started its market-wide embarkation in 'za territory.

Marketing firm Vericast has just published the results of its Awareness-to-Action Survey, which asked nearly 2,000 U.S. consumers about their dining habits in January 2023. The findings are in, and they don't bode well for pizza restaurants. Per the firm, frozen pizza sales saw an 11% increase in sales in 2022, via Restaurant Business. This figure might seem small, but it could be part of a much larger shift: 69% of consumers who used to regularly visit pizza restaurants have been making the switch to frozen.

According to Restaurant Business, Domino's reported a significant drop in delivery sales earlier this month, which could be the telltale sign of a larger industry-wide issue as customer loyalty dwindles and delivery costs skyrocket, all while inflation remains scarily high. Per the Vericast survey, the top four pizza chains in the U.S. collectively raked in 3% less profit during the 2022 sales year compared to previous years. Grocery stores and other retailers have caught on: In the past year, frozen pizza promotions have increased by a whopping 214%.

It doesn't seem like this shift is likely to change any time soon as people choose cheaper food options. In a Tasting Table Exclusive Survey, nearly 75% of readers said they would likely be switching to private label items when shopping, and 8.46% said they were primarily private label products already. That was in September 2022. Now, per the new Vericast findings, the reality is that consumers never really stopped the at-home "nesting" trend that took hold during the lockdown in 2020. Market trends show that folks have been staying home more and more for food and entertainment. In fact, 45% of consumers told Vericast that they plan to spend less on eating out in 2023. Already, 64% of respondents said inflation has put a bad taste in their mouths, and they're eating out less altogether, not just at pizza joints. Another rocky spell could be on the horizon for the restaurant industry.