Fresh is hot. Keeping those perimeter sections fresh (please excuse the pun) is paramount for retailers looking to combat shrinking center store sales and deflation.
Ninety-nine percent of consumers purchase fresh items from grocery stores, but there are more options than ever with mass and superstores (81% of consumer have purchased fresh here), warehouses and clubs (57%), convenience and gas (26%) and drug stores (18%) getting in on the fresh purchase action, according to Sarah Schmansky, director of fresh growth and strategy for Nielsen, at a Future of Fresh session at NGA.
For the first time in more than a decade, food away from home sales surpassed food at home sales last summer as consumers are taking advantage of low gas prices and innovative restaurant options to drive out-of-home dining experiences, according to Schmansky.
Add to those factors the fact that total store growth in 2017 is projected at 1% (a slight improvement over flat sales in 2016), and you can see why it’s more important than ever for retailers to grow their fresh market sections.
So how are retailers doing that? Winn-Dixie, for example, is piloting a store that will celebrate food by putting the fresh sections at the forefront. Other stores are highlighting dine-in foodservice options or focusing on experiential beverages, i.e., wine and specialty beer sections and in-store bars.
“You need to get consumers in the store for something other than just their grocery shopping,” Schmansky said.
At Coburn’s, growing the fresh sections means growing them through digital sales. “We have to go over and above to gain consumers’ trust when purchasing produce online,” Emily Coburn, VP of fresh merchandizing at Coburn’s, said at the NGA session. Coburn’s Delivers allows consumers to purchase items online for delivery the next day. To gain customers’ trust with produce purchased online, the retailer will unpack berries to make sure there are no moldy berries and then repack them. “We take a lot of pride. We know it’s a huge investment but we know we have to do that if we’re going to be known as a produce fulfillment option online,” Coburn said.
Coburn’s also provides customers with a “good,” “better,” “best” online ranking so they know when they are getting produce at the peak of the season.
The meat department holds opportunity for growth, particularly those that cater to the multicultural consumers.
According to Schmansky, multicultural shoppers make 3% more trips including fresh foods and spend more 4% more on fresh foods each year. That equates to 80,000 additional trips and $60 million in incremental sales.
In terms of meat, consumers aren’t just looking for a large steak and potatoes anymore; there are lots of ethnic applications that use smaller and cheaper portions of meat. That means that some consumers can increase the frequency of their meat purchases rather than only being able to afford to buy it once a week.