Catch A Wave
Analysis by Meg Major
Though not quite on top of the world, supermarket seafood departments are picking up good vibrations from positive consumption trends and quality-minded consumers.
Though sustaining stronger year-round sales continues to be a mandatory expedition for most retail seafood executives, many supermarkets are riding a wave of favorable undercurrents relating to greater awareness of the health benefits of more frequent fish consumption, and consumers' gradual willingness to pay a premium for quality over quantity, according to insights revealed in Progressive Grocer's 2013 Annual Seafood Operations Review.
Indeed, while retail seafood teams are immersed in various campaigns to elevate interest and capture strong, steady sales of their departments' fresh and flash-frozen stock on a more routine basis — on par with winter holidays, Lent and peak summer-seafood occasions — the inherent setbacks of shrink, pricing, labor, environmental issues and sourcing require a delicate balancing act to keep the profit ship afloat.
However, despite the intrinsically choppy waters that are part and parcel of the larger seafood ecosystem, investments in training, equipment, and third-party sourcing and safety audits by many grocers — from single-store operations to regional grocers and even national chains — have enabled their stores to become go-to sources for high-quality catches and value-added options for convenience-seeking shoppers.
Insights revealed in PG's annual seafood department survey were compiled from the collective input of a diverse range of retail seafood directors from around the country, who responded to a survey fielded in late 2012. The annual seafood study provides a snapshot of benchmark sales and operations trends, inclusive of profits, top departmental challenges and consumer purchase patterns.
In a closer look at key findings of the latest national supermarket seafood survey, 30.4 percent of survey panelists posted sales increases during 2012, while 26.1 percent reported decreases, rounded out by 43.5 percent claiming no noticeable changes in either direction. All told, this year's seafood survey results depict a net 2.4 percent growth rate in overall department sales.
Bucking recent years' profit performance trends, 40.8 percent of survey respondents to this year's seafood study reported an increase, while a comparatively smaller percentage (22.2) of respondents cited lower profit trends during the past year, along with 37 percent who reported unchanged profits.
In assessing the key challenges facing retail seafood executives — who were again asked to rank the seriousness of various issues on a scale of one to six — shrink ranked as the top concern, paced next by pricing. Profits dropped back two rungs to the third most vexing issue, followed next by environmental/social issues and sourcing considerations.