Skip to main content

Consumer Priorities Drove Fresh Food Sales In 2009

Shifts in the availability of fresh foods across retail channels spurred competitive promotional strategies at supermarkets in 2009, according to recently released fresh department studies by the Chicago-based Perishables Group.

In the produce, deli, bakery, meat and seafood departments, health remained a top priority for consumers, as did stocking up on purchases when a good value was available. Consumers responded to aggressive promotions across departments, most notably in seafood, which posted 5.4 percent sales growth year over year.

“Consumers have developed the habit of buying items primarily when they are on sale,” said Perishables Group president/CEO Bruce Axtman. “Retailers responded by offering deep discounts to draw in consumers and build loyalty in the face of competition from multiple channels.”

The impact of promotions was especially apparent in the seafood department, which was one of two fresh departments to increase both dollars and volume in 2009, after it declined the most in 2008.

The increased availability of private label items, coupled with consumers’ desire to purchase products that offer low prices but high quality, spurred private label sales growth across fresh in 2009. Private label’s share of sales increased in each fresh department by approximately 1 percent in 2009 compared with 2008.

The bakery department had the largest share of private label sales, driven primarily by desserts. Desserts led the department in both dollar and volume growth in 2009, and fueled private label growth with respective increases of 4.7 percent and 7.2 percent in private label dessert dollars and volume.

Though consumers were value-conscious last year, health remained a top priority. “Natural” products gained in popularity, with sales growing in all departments except meat, including 166 percent growth in the bakery. Meantime, sales of organic products declined in the bakery, deli and seafood departments.

The interest in health and increased distribution of ready-to-eat and fresh-cut produce helped boost produce department volume growth in 2009. Increases occurred in the prepared-vegetable category, including beans, broccoli and cooking greens. Sales also increased in herbs as well as healthy snack fruits such as prepared pineapple and grapefruit.

In the bakery department also, healthy alternatives fared well, as sales of whole grain breads increased 9.5 percent, and sales of gluten-free items experienced a 604.2 percent dollar increase.

As many categories, brands and retailers struggled to post growth in 2009, deli maintained sales compared with 2008. Half of the deli department’s dollar and volume sales came from deli prepared foods, which was the only deli super-category to increase dollar sales. Deli pizza showed the largest increase in dollar growth, up 10 percent compared with 2008.

Despite lower average retail pricing, the meat and seafood departments were the only two to increase both dollars and volume in 2009. Fully cooked meat, which accounts for 6 percent of meat department dollars, had the greatest dollar increase from the prior year. Growth was driven primarily by fully cooked chicken, which increased 3 percent in sales in 2009.

“After keeping tight budgets in 2008, it became clear in 2009 that consumers are now willing to spend more for fresh food items if they perceive the value to be high,” said Axtman, noting that although supermarkets are facing increased competition, “they can come out ahead if they understand the balance between providing the appropriate assortment for their shopper demographic, and driving sales through value rather than price.”

For more information or to purchase the “Perishables Group State of the Department” reports, contact [email protected] or call (773) 929-7013.
X
This ad will auto-close in 10 seconds