Sales passed the £1bn mark in early 2008 but fell in the recession to a nadir of £967.8m in February 2009 as consumers turned to scratch cooking to save money. A combination of returning consumer confidence, meal deals and product launches pushed sales back above £1bn, where they have remained since the end of 2009, according to Kantar.
Consumers tended to cook from scratch at the start of the recession to save money but then returned to their old habits, said Newby Groves, head of licensing for Greencore Foods, which makes branded and own-label chilled ready meals.
"Shoppers still rely on convenience foods because life still has to go on during a recession," he added.
Rebecca Martyn, category manager for meal solutions at Sainsbury's, said ready meals had also benefited from the stay-at-home trend. "Customers are eating out less and having fewer takeaways so there is a great chance with meal deals and meal boxes to recreate that experience at home," she said.
Italian and Indian meals, which together account for £495m of sales, have been the biggest drivers of growth with sales up 9.6% and 9.2% respectively year-on-year.
Marks & Spencer continues to be the undisputed king of the ready meal, selling more than any other retailer by value, with a 24.4% share of the chilled ready meals market, despite only commanding a 3% share of the total grocery market. Its share has been boosted by the popularity of its much-copied Dine In for two for £10 promotion. However, Tesco is hot on its heels; Tesco's ready meal sales rose 11% in the past year giving it a 24.1% share of the ready meals market.
Tesco has invigorated its ready meal line-up over the past year, including the launch of The City Kitchen tertiary brand in June 2009 and the relaunch of its Finest Restaurant Collection. It has also revamped its offer in the only segments of the market that have seen falling sales Chinese and Mexican, down 9.6% and 9.1% in volume respectively.
Tesco replaced its Chinese ready meals with a Ken Hom range in October, to tackle consumer perceptions of Chinese ready meals as inauthentic and unhealthy. The Ken Hom collaboration was about more than just a face on the packaging, a spokesman said. "Celebrity tie-ups will only drive the market if they offer excellent products," he said. Since launch, Tesco's sales of Chinese ready meals had grown 14%, he added.