Inside the Valentine’s grocery store worth struggle: How retailers satisfied buyers high-end prepared meals are romantic

There will be no place like home this Valentine’s Day, as the romantics swerve restaurants in favour of the supermarkets’ premium ready meal offers.

Over 80 per cent of M&S shoppers plan to dine in to save money. It’s a trend that is yet more bad news for the beleaguered hospitality sector, which has been hit by a cocktail of higher alcohol duty, business rate and national insurance increases. 

But restaurants’ loss is turning into the supermarkets’ gain amid talk of a price war between grocers.

A boom in stay-at-home dining means that the market for £10+ take-home dining products is worth £317m a year, according to market research firm Worldpanel by Numerator.

What was once seen as a quick option for the lonesome sofa dweller or the time-poor is now a ripe opportunity for restaurant-quality feasts at home.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: ‘Consumers are currently making fewer trips to out-of-home destinations to eat and drink amid rising prices. 

‘This points to potential growth for higher-end prepared meals, as shoppers look to recreate the restaurant experience in the comfort of their own home for less.’

Supermarket bosses also credit the shift to a ‘hangover’ from Covid, when consumers got used to marking special occasions at home.

Meanwhile, social media trends have encouraged people to ‘romanticise your life’ by decorating their homes with crafts or affordable homewares.

Jonathan De Mello, a retail analyst at JDM Retail, said: ‘For consumers, the value proposition of premium dine-in is undeniable- trading a £100 restaurant bill for a £25 high-end ‘at-home’ experience.’

And retailers can secure a ‘halo effect’ of ‘long-term loyalty and higher margins’ when they offer ‘an affordable luxury in experience at a fraction of the price of a sit down restaurant,’ De Mello said.

Michelin ready meals entice shoppers 

Supermarkets are keen to emphasise the ‘restaurant quality’ nature of their products.

M&S even employs a Michelin-starred chef – Tom Kerridge – as the culinary mastermind behind its Gastropub range.

And Tesco and Sainsbury’s have got their own premium tiers of ready meals, which are aimed at capturing an ‘affluent “trade down” shopper,’ De Mello added.

Demand is so great that this week Sainsbury’s said its Taste the Difference range has exceeded its £2billion annual sales target ahead of schedule. It is selling products including scallop’s gratin, rump steak, and blonde profiteroles this Valentine’s.

James Campbell, Sainsbury’s head of innovation, said: ‘We’re expecting more customers than ever to celebrate Valentine’s Day at home this year. People still want that restaurant‑quality experience, but they’re looking for it at great value and that’s exactly what Taste the Difference is designed to deliver.’

Retailers say diners want the traditional staples, including steak and ‘marry me chicken’, as well as trendier products such as pistachio desserts.

The dine-in market is made up of a £122m ready main meals or side dishes category, according to Worldpanel. Chilled deserts make up £30m while wine is worth £27m.

And M&S makes up a little more than half of this spending.

Kathryn Turner, director of product development at M&S Food said: ‘This year our M&S Valentine’s Day Dine In offer is the best it’s ever been – every single product is from our Collection range, made to restaurant quality standards and we’ve included a bottle of Crémant following the rise in popularity over Christmas. 

‘We’re continuing to see customers ‘Dine in to Dine out’ as more of us are looking to bring restaurant quality food into our homes to celebrate.’

Some 41 per cent of baskets with deliveries scheduled between 13th and 15th Feb include the M&S Valentine’s dine deal, according to data from online grocer Ocado Retail, which is half owned by M&S.

Romantic shoppers opt for full-day celebrations

A Valentine’s Day weekend has inspired customers to plan romantic brunches, according to Ocado. Products doing well include salmon, avocado, and bagels.

Dan Elton, chief customer officer at Ocado Retail said: ‘Our data shows with Valentine’s falling on a weekend, celebrations are extending across the whole day, with sales of brunch items trending alongside more traditionally associated Valentine’s products. 

‘These shifts reflect the growing appetite for flexible options that allow customers to create special moments at home for less, without compromising on the quality of the experience.’

It is not just financial pressures driving this trend. Social media – on which youngsters sing the mental health benefits of ‘nesting’ and ‘cocooning’ while decorating for Valentine’s with home-made paper-chains – has also encouraged consumers to stay in.

The chief executive of Dunelm, Clo Moriarty, said that ‘I think people are loving their homes more and more as time goes on.’

Supermarket price war rages on 

It comes as there is hot competition between grocers despite pressure on food commodities. Dine-in is a huge battleground.

Tesco and Sainsbury’s still reign supreme as Britain’s first and second biggest supermarkets while number three Asda is facing pressure from discounter Aldi.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘Competition in the supermarket space continues to heat up, and it’s no surprise to see some of the bigger names coming out on top.’

He added: ‘The nation’s second-largest supermarket, Sainsburys, continues to cash in on customers shopping around for the best deals, recording more market share gains over the festive season. 

‘Its premium Taste the Difference range continued to deliver double-digit growth – a trend likely to continue in the run-up to Valentine’s Day, as many cost-conscious couples look to treat themselves at home rather than dine out this year.’

But is a far more tumultuous time for Asda, which is this year offering a £12 Valentine’s dine-in meal combination.

The retailer is more than a year into what chairman Allan Leighton reckons will be a three-to-five-year revival mission.

Asda’s market share has shrunk since its takeover five years ago by private equity firm TDR and the billionaire Issa brothers.

Chiekrie said: ‘The nation’s third-largest supermarket chain has continued to give up share to peers since its takeover by private equity five years ago. And with competition remaining fierce in the sector, it’s not clear how Asda will be able to turn the ship around.’