In deli there is strength, sayeth retailers.
Deli department sales are robust and expected to continue on this trajectory, according to the grocers responding to Progressive Grocer’s exclusive Retail Deli Review survey.
Nearly three-quarters of the survey respondents said that their deli sales rose in 2018 compared with 2017, and an even greater number — more than 80 percent — said that they anticipate additional growth during 2019.
WHAT FACTORS DO YOU CONSIDER TO BE MOST INFLUENTIAL IN SECURING STRONG EVERYDAY DELI DEPARTMENT SALES?
WHAT AREAS OF YOUR DELI/PREPARED FOOD OPERATIONS WILL YOU CONCENTRATE ON ENHANCING DURING 2019?
|Current||Year Ago||Current||Year Ago|
|Signature Items||43.3||48.3||Meal Deals (bundled meals)||41.7||48.3|
|Active Sampling/Events||33.3||37.9||Side Dishes||30.0||27.6|
|Premium Brands||10.0||6.9||Hot/Cold Bars||23.3||44.4|
|Social Media Special Offers||8.3||10.3||Daily Specials||23.3||44.4|
|Incentive-Based Discounts||6.7||0.0||Rotisserie Programs||20.0||48.3|
|POS Coupons/Discounts||6.7||6.9||Category Management||15.0||10.3|
|Executive Chef||5.0||3.4||Premium Brands||15.0||3.4|
|Increased On-Ad Specials||3.3||0.0||Soup Stations||15.0||24.1|
|Extended Hours of Operation||3.3||6.9||Private Label||11.7||20.7|
|Concept Food Stations||6.7||3.4|
WHICH OPERATIONAL ISSUE DO YOU CONSIDER TO BE THE SINGLE MOST CHALLENGING FOR YOUR FRESH PREPARED FOOD PROGRAM?
WHICH OPERATIONAL ISSUE DO YOU CONSIDER THE SINGLE MOST CHALLENGING WITH REGARD TO YOUR SERVICE DELI PROGRAM?
|Product Quality Levels||5.0||Training||11.7|
*Source: Progressive Grocer market research, 2019
Talent and Experience
In PG’s Annual Report of the Grocery Industry in April 2019, retail grocery executives told us that the top issue keeping them up at night is recruiting, training and retaining talent.
The folks running their delis agree — nearly 60 percent of respondents to PG’s deli survey said that “engaged associates” is the most important factor in securing everyday department sales. Additionally, labor was — by far — the leading operational issue named by deli operators, and staff training tied for second place among areas most targeted for investment this year.
“I can’t stress enough the imperative of the team member and guest experience,” Woods asserts. “Simply taking care of team members and guests by providing what they want, when they want it, and at a value they are willing to shop you for, is point of entry. Delivering a personal experience that includes surprise and delight, ‘worth it’ opportunities, personalized offers and simply being obsessive. Making every decision on layouts, offerings, concepts, merchandising and training is all in the best interest of our team members and guests.”
Progressive Grocer’s Retail Deli Review is based on an online survey of retail grocery leaders in March and April 2019. There were 70 respondents in all, encompassing store owners, CEOs, presidents, deli executives and other supermarket deli department decision-makers. Of the respondents, about 55 percent were from grocery operations with 10 or fewer stores, with about 45 percent from chains of greater than 10 stores.
Fittingly, “merchandising/experience” tied for second, with signature items, as the most important factor in deli sales.
Oleson expects a transformation in the coming years. “I believe the idea of a deli will change a lot over the next decade,” she says. “The concept of a traditional deli is becoming intertwined with other departments, and I only see that growing. I think it is best to keep an open mind and be prepared to jump on any opportunity. Our customers want different things then they did in the past, and it is our duty to follow their lead.”
She continues: “As we see a shift in the generations, we will see a shift in our shopping habits and, in turn, how we need to serve those customers. The mix of Baby Boomers, Millennials and Gen Z will make for an interesting time for merchandisers as they attempt to please all generations.”
“There are opportunities for late adopters,” Woods concludes, “by promoting local, transparency, convenience, solutions, health — both for a lifestyle-of-want and a lifestyle-of-need opportunity — and doing grab-and-go right.”