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MOST LIKE IT HOT

Consumers would let supermarket delis feed them dinner -- as long as the department has all the pieces of the puzzle, according to a new survey of consumer attitudes.In one of many findings in a national survey of consumers conducted exclusively for SN, nearly 60% of consumers said they would buy their dinner at a supermarket deli, if both entrees and side dishes were available.What's more, nearly

Consumers would let supermarket delis feed them dinner -- as long as the department has all the pieces of the puzzle, according to a new survey of consumer attitudes.

In one of many findings in a national survey of consumers conducted exclusively for SN, nearly 60% of consumers said they would buy their dinner at a supermarket deli, if both entrees and side dishes were available.

What's more, nearly half said they would buy roasted chicken specifically from a supermarket deli, instead of from a food-service establishment.

Those are doubtless encouraging words for retailers who already have a good rotisserie program going, said industry observers commenting on the results of the survey, which was conducted in late April by America's Research Group, Charleston, S.C.

Retailers should also note, however, that nearly three-quarters of survey respondents said they want to buy that dinner hot, rather than chilled and ready-to-heat.

Tom Pierson, professor of food marketing at Michigan State University, said this reflects Boston Market's influence.

"The statistics in this survey confirm what we've been hearing -- that consumers want to buy a meal, not just an entree -- and the responses about buying the meal hot also underscores the fact that Boston Market is on the right track," said Pierson, whose work at MSU includes tracking food marketing business as it relates to supermarket delis.

While getting it hot is hot, eating it on the spot is not. A very low percentage of respondents said they would eat in the store if seating were available. Only 3% said they would do so often if seating were provided; 23.7% said they would sometimes. But a whopping 36% said they would never eat in the store and another 37.3% said they would do so only rarely.

The survey involved polling 1,000 consumers via telephone. Nearly 90% of respondents were blue-collar workers, white-collar workers or retirees, with annual incomes ranging from $15,000 to $75,000. The group responding was just about equally divided between men and women; males made up 50.1% of the group and females, 49.9%. Also, respondents were fairly evenly divided among six geographic areas of the United States.

Asked if they would prefer to buy dinner hot or ready-to-heat, 72% said they would purchase the meal hot. Only 25.5% said they would buy it ready-to-heat, and 2.4% said they were not sure which they prefer.

What surprised some industry pundits was that more than half of the respondents said they would be more likely to buy the meals from the service counter in the deli, rather than from self-service.

About 64% said they would buy the items at the service counter, compared with 20.3% who would buy it self-service; 15.3% said they didn't know whether they would buy the meal at the service counter or from a self-service case.

While consumers were not asked why they would choose to buy their meal at the full-service counter, industry experts theorized that the respondents saw a correlation between service and fresh.

"We know from survey after survey that consumers put a high value on fresh. I think customers wanting their food dished out for them at the service counter connect that dishing out with freshness. They go together," said Stephan Kouzomis, president of Entrepreneurial Consulting, Cincinnati. Kouzomis noted that supermarket top management should take this as added confirmation that having enough well-trained associates in the deli department is an absolute necessity if supermarkets are going to capture a fair share of the meals market.

"They can't just keep beating labor back," he said. He pointed out that customers have to be educated about how the deli can solve their meal problems, and associates can play an important role in that effort.

More than seven out of 10 consumers saying they would buy their meal components hot rather than ready-to-heat could be an unpleasant surprise for retailers who are gearing up to offer more chilled meal items. But, while the data may be surprising, it could also show supermarkets the way to new opportunities, Pierson suggested.

"It may be an upstream swim, but supermarkets could use chilled, prepared foods as an opportunity to differentiate themselves. You're not going to see Boston Market doing that.

"It's actually easier to merchandise chilled foods to make a meal suggestion. You can have a place setting, a bottle of wine, everything that goes with a meal, on top of the case," Pierson said. On the other hand, "the steam table just sits there with its individual selections," Pierson said.

Chicken fared well as a meal item that many respondents would readily buy from a supermarket. A total of 48.8% said they would buy chicken in the deli, compared with 50.2% who said their choice would be to buy it from a food-service establishment.

Supermarkets did not fare as well for some other important takeout alternatives. Only 20.6% said they would buy pizza in the deli instead of from a food-service outlet, while 16.6% said they would buy Chinese food from a supermarket deli. On the other hand, 55.7% said they would buy sandwiches from the deli.

Industry sources said that such specific comparisons between competing meal providers can be misleading when projected nationally, since the answers could be heavily dependent on how strong the competition is for each food category in any particular market area.

Britt Beemer, founder and chairman of America's Research Group, said ready-to-eat dinners represent a "huge opportunity" for supermarkets, but he added it's unclear whether they will be able to capture much of the market.

One significant obstacle "is the amount of time needed to pay," Beemer said. "Consumers aren't willing to wait in line, holding their hot dinner, while someone ahead with a full buggy takes 8 minutes to check out." Pierson, however, said the biggest challenge for supermarkets is communicating the message that the deli can solve consumers' meal problems.

"Paying quickly and getting out quickly is not such a barrier. Several supermarket chains have solved that problem fairly easily by putting registers in the food-service department. Look at Wegmans, for example. There are cash registers clearly dedicated to food-service purchases," Pierson said.

While some industry experts insist that deli-food-service departments be near the front of the store so customers can get in and out quickly, in this survey consumers didn't necessarily see that as a plus. Only 16.7% said they would prefer the deli to be at the front of the store.

Consultant Kouzomis agreed. "Shoppers need to be reminded of what's available in the deli that can help them solve their meal problems. The deli has not become an alternative as a place to get something to put on the table tonight. Supermarkets could do it in ads that refer to the deli's meal," he said.

Too many supermarkets are stuck on price as a motivator. "They're still concentrating on telling customers they can get boiled ham for $3.99. Today's boomers are different shoppers than their parents. They have more disposable income and they want to protect their time," Kouzomis said.

The survey did indicate, however, that about four in 10 consumers would pay no more than $3.99 for a meal in the supermarket deli. About 28% said they would pay up to $5.99. Almost 10% would pay $7.99, while 5.2% said they would pay more than $7.99.

Pierson suggested offering a meal of the day in three tiers of pricing: one for $3.99, one for $5.99 and one for $7.99.

"We shouldn't lose sight of the fact that nearly a third said they would pay $5.99 and nearly 10% said they would pay as much as $7.99," he said.

Brian Salus, president of Salus & Associates, a Midlothian, Va.-based consulting firm, cautioned that the consumers' responses on pricing can be misleading.

"I would not like to see retailers take those figures as a guide to what they can charge for a meal. They shouldn't be competing with the fast-food chains. We know that consumers see supermarkets as the place to get fresh product," Salus said.

Salus was formerly director of food service for Ukrop's Super Markets, Richmond, Va., a leader in the supermarket industry's hot and chilled prepared food programs.

He said his firm's research has found that responses are "incredibly skewed" in geographic areas where there's a supermarket operator with a well-developed food-service program.

In America's Research poll freshness outweighed price and variety as a factor in choosing fresh meals from the deli, although all three factors were important to the respondents.

Slightly more than 40% of respondents said they shop the supermarket deli once a week. Others responses to deli-shopping frequency were: every two weeks, 23.6%; twice a week, 14.1%; once a month, 13.4%; more than once a week, 5.4%; never, 3.3%.

Nearly six in 10 respondents said they come to the deli because they planned to buy items there. Another 15.5% said ad circulars prompt them to go into the deli. A display could attract 14.4%, while a sale sign could get another 11% of the respondents into the deli.

But a larger number, 43.6%, cited sampling when asked what could pull them into the deli if they hadn't planned to make a purchase. Nearly a third, 29.3%, said aroma would be an impetus to get them to the deli. Signs at the store front were cited by 11.3% and public address announcements by 9.7% of those polled.

Take-Out Trends [chart]

Despite the popular portrait of an American public with no time or inclination to cook, fully three-quarters of consumers still say they eat out or order in food no more than three times a week.

How many times a week do you eat out/order in?

Once a week 33.1%

Two times 26.7%

Three 16%

Four 7.1%

Five or more 6.4%

Never 9.9%

Source: American Research Group/SN

Food Fight [chart]

When it comes to the four big take-out segments -- chicken, pizza, sandwiches and Chinese Cuisine -- supermarkets may not be winning, but they are putting up a good fight against fast-food providers. Note especially the strong showing with chicken and sandwiches.

Where would you be more likely to buy the following fresh items for a meal: a supermarket deli or a food-service outlet?

Supermarket deli Food-service Not sure

Chicken 48.8% 50.2% 1.0%

Pizza 20.6% 78.5% 0.9%

Sandwiches 55.7% 43.5% 0.8%

Chinese Cuisine 16.6% 82.35 1.1%

Sense Appeal [chart]

Consumers say the best way to attract them into the deli is to offer them a taste and a smell of the fresh product there. Signs at the front of the store can also help remind them about the deli, they said.

What could pull you into the deli, if you hadn't already planned to shop there?

Sampling 43.6%

Aroma 29.3%

Signs at front 11.3%

PA announcement 9.7%

Don't know/misc. 4.7%

Specials/sales 1.4%

Better Fresh Than Fast? [chart]

Perhaps because of perceptions that the product in a service case is fresher, a majority of consumers said they would more readily buy a meal from the full-service section than grab it themselves and go.

Would you be more likely to buy meal items from a full-service or self-service section?

Full-service 64.4%

Self-service 20.3%

Don't know 15.3%

Full Meal, And Make It Hot [chart]

More than half of consumers were quite open to the idea of using the deli for a meal solution -- so long as the solution is complete -- and, preferably, offered hot.

Would you buy your dinner at the deli department if a choice of entrees and side dishes were available?

Yes 58.7%

No 35.3%

Don't know 6%

If Yes, do you want to buy those meal components hot, or ready to heat?

Hot 72.1%

Ready to heat 25.5%

Don't know 2.4%

Source For all charts: American Research Group/SN