Shannon Jimenez, Director Consumer and Shopper Analytics, Nielsen
For most American shoppers, the weekly grocery list is filled with fresh foods: meats, deli, produce, baked goods and the like. For those who have been closely following consumer trends, this comes as little surprise, as Americans have reduced out-of-home dining and cook food at home more regularly. One part stretching household budgets and another part finding a genuine joy in cooking and breaking bread with family and friends, at home dining seems to be back in vogue. Obviously, then, fresh foods are important for grocers; in fact, they represent one-third of grocery channel sales.
Fresh foods have long been the purview of supermarkets. In most stores, shoppers are greeted by colorful displays of fruits and vegetables, refrigerated cases of fresh meat and the smell of freshly-baked breads and cakes. They appeal to the senses like few other categories. And they have maintained sales while other parts of the store have declined.
But supermarkets lock on this category is facing increased competition. Perhaps seeing this, mass merchandisers and club stores have bet on fresh foods, and thus far, it looks to have been a wise one: fresh foods have been the only departments posting sales increases in these channels, up 1.1 percent in mass merchandisers/supercenters and up 1.9 percent in club stores resulting in respective 0.1 and 0.2 share growth. Mass and Club continue to attract more fresh food buying households, increasing Grocery channel competition for the consumer’s fresh food dollar. Grocers need to create synergies to drive center store and perimeter sales.
How can grocers take advantage of perimeter store sales and leverage that success in the center store?
- Assist the shopper’s decision-making process. Fresh categories require a high-level of decision making: how important is variety, brand assortment and promotions? Where do the products come from, such as locally grown produce, sustainability farming and animal welfare? Educate shoppers with in-store displays and online education with respect to origin, nutrition, growing trends and recipes. In-store product samples are always effective introductions to new products.
- Drive impulse buys in bakery and deli. While Bakery and Deli are less likely to trigger a trip, finds ways to drive impulsive or reminder purchases. Few things are more mouthwatering than the smell of fresh bread or cookies coming out of the oven or expansive displays of lunchmeats.
- Optimize center store strategies. When meat is in the basket, it is likely to be joined with meal starters and side dishes. Bakery purchases are often accompanied by deli meats and cheeses as well as condiments. Produce is often joined by fish and meal starters. Understand these synergies to build shopper basket size.
- Expand prepared food offerings. The only deli department segment growing (+3.5% for 52 weeks ended Q1 2011), prepared foods such as cooked chickens, salads and sandwiches represent more than half of dollars spent in the category. These offerings cater to shoppers’ increasing desire for convenience, quick preparation and ready-to-eat meal options. Quality meal deals are key to driving repeat purchases, and offer opportunities to cross-promote (e.g., chicken plus soft drink deals).
The ways grocers can enhance their fresh offerings are almost endless, and done the right way, they are a key differentiating factor in the increasingly competitive marketplace that can keep customers coming to stores and increasing basket size.