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02/22/2022

How Grocery Delis Can Compete With Customers’ Return to Restaurants

Supermarkets should pay attention to consumers’ evolving demands and preferences in prepared foods
Erin McCulloch-Crume
Director of Deli and Emerging Business at Bay Food Brokerage
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Customers gravitate toward clear packaging for prepared meals more than prepackaged items with no visibility of the products inside.

The COVID-19 pandemic initially diverted consumers from restaurants and toward grocery stores. As a result, prepared meals offered in grocers’ delis saw significant sales growth.

In fact, recent industry reports from experts at IRI and the International Dairy Deli Bakery Association show that sales of prepared meals offered in the deli increased by nearly 17% from September 2020 to September 2021. It’s clear that for many consumers, prepared meals offered the level of convenience typically provided by restaurants at a time when dining out wasn’t a viable or preferred option.

But now, restaurants in most states have fully reopened, and consumers are more confident about eating out. So the question for grocery store delis becomes: how can they keep customers interested in buying those prepared meals?

Here are several ways that grocery delis can react to consumers’ evolving demands and preferences to compete with customers’ return to restaurants.

Transparent Packaging

Simply put, people eat with their eyes. So, presentation of prepared meals is an important part of what makes a best-in-class deli.

Customers gravitate toward clear packaging for prepared meals more than prepackaged items with no visibility of the products inside. Clear clamshells, sous-vide bags and skin-packed HPP meals all allow deli customers to see the product before buying.

Looks Prepared In-Store

In addition, meals that look like in-store staff prepared them tend to attract customers because it implies a level of freshness that customers expect when shopping the deli.

We see this strategy a lot with delis where labor continues to be a challenge. They sell prepared meals that look like they were made in-store, but actually come in kit form or even fully prepared from the manufacturer.

Diverse Offerings

Many consumers can get bored of eating a traditional American meal every night. Grocery delis offering only standard fare – fried chicken, rotisserie chicken, pizza, pastas – should consider offering international meals as well.

Meal options that are diverse in flavors and profiles give deli customers a variety of meals to choose from multiple nights of the week. Offering Indian, Asian, Latin and other ethnic cuisines will keep customers coming back because they’ll have a variety to choose from.

Also, grocery delis shouldn’t fear taking a risk with international cuisine prepared meals. These options will be a higher ring, although potentially not as high velocity as  traditional fare, but they can increase overall deli sales because you’re offering variety that gets the customer in more frequently.

Bundle Products for Meal Deals

Many restaurants offer meal deals – for example, offering an entrée with an appetizer, dessert and drink for a set price. Deli customers also respond well to creative bundling of prepared meals and other products as “meal deals.”

For example, grocery delis can work with other parts of the store to offer a take-home lasagna with a Caesar salad, tiramisu and a bottle of wine, and market it as a date-night meal. This not only can help boost deli sales, but also bakery, CPGs and/or other areas of the store.

Size Variety

Another way delis can compete with customers’ return to restaurants is by offering a variety of meal sizes. Prepared meals that come in both family and individual sizes will give customers options, depending on their lifestyles.

It’s important to note that according to the most recent census data, in 2021 there were 37 million one-person households in 2021, or 28% of all U.S. households. Offering a variety of sizes will allow consumers to choose what works for them.

Delivery Options

It’s important for grocery delis to note that while restaurants are competitors in the prepared food arena, so are food delivery services like UberEats and DoorDash. According to a recent McKinsey & Co. report, the food delivery market more than doubled during the COVID-19 pandemic.

Food delivery services offer consumers restaurant food at the greatest level of convenience. To compete with this, retailers should heavily promote their fresh prepared meals and meal bundles on their websites and apps, and make them available for delivery and pickup.

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