Pick n Pay has promised in increase innovation in ready meals, betting that cash conscious consumers will stay and home rather than go out.

Perhaps counterintuitively at a time when all the major South African supermarket chains are focusing on value, Pick n Pay has announced it is looking to increase innovation in ready meals.

The reasoning?

Consumers aren’t trading up from home cooking but trading down from going out to eat.

Sales of ready meals in South Africa shot up during the boom years of 2005-2012, as time pressed consumers with disposable income drove innovation. Half of South African women over the age of 15 are in the work force, and often work some distance from their homes.

As the economy stuttered and ultimately went into recession, supermarket retailers focused intensively on their price credentials. For a long time Pick n Pay came second best to Shoprite on improving the operational efficiency that underpinned successful price cutting. Now, as the economy improves but consumer confidence is still yet to bounce back, supermarket retailers are having to find new ways to increase basket sizes while assuring consumers of value.

Three of those areas are health, ‘ready meal minus’ and ‘entertaining in’.

Health, obviously enough, refers to making products healthier while giving consumers satisfaction. South Africa has a growing obesity crisis and consumers across all income groups are regularly messaged on the need to cut down intake of fat and sugar.

Ready meal minus refers to the peripheral opportunities in the ready meal and wider food space to help consumers corners without having to give up cooking – pre-chopped vegetables, pre-made marinades for braai meat all contribute.

Finally, entertaining in, which is primarily aimed at the top income groups. The point here is that all income groups have felt the pinch and at a time when consumers want permission to indulge but feel nervous about spending innovation that encourages consumers to trade down from eating out is an easy win. This has traditionally been Woolworths territory and it will be interesting to see how successful Pick n Pay can be at really conveying luxury credentials to consumers, both in the product and the shopping environment.