Efficiencies drive margins in retail foodservice

Sponsored by DayMark

Prepared foods have become an important source of traffic, sales and profits for supermarket retailers.

In the current environment of rising prices, consumers are seeking cost-effective meal solutions, but they also want a break from the chore of cooking all of their meals from scratch. Those factors indicate a prime opportunity for supermarket prepared foods.

Finding efficiencies in prepared food production, from ingredient sourcing to labor to packaging and labeling, can help yield higher margins in this department, and can help retailers remain competitive on price.

“There is a lot of opportunity to re-purpose items from around the store into daily operations,” says Anne-Marie Roerink, principal at research firm 210 Analytics, citing as an example the repurposing of rotisserie chicken into chicken salad.

Similar to restaurants, retailers have an opportunity to create prepared-food specials using items from other departments that may be nearing their mark-down date or lost to shrink.

“It’s all about finding the right balance between menu flexibility and efficiencies,” says Roerink.

Inflation and fluctuating supply costs require that retailers understand the impact of the input costs for all of their prepared food items, she says.

“If a certain ingredient is experiencing extreme inflation, an item-level understanding can help swap ingredients to bring down the production costs to maintain the margin,” she says.

Sales of deli-prepared foods have been increasing in 2022, according to reports complied by Roerink for the International Dairy, Deli & Bakery Association. While price inflation has driven much of the sales growth, some categories, including prepared entrées and combination meals, have seen strong underlying growth.

Roerink says time-pressured consumers are seeking to get in and out of the store quickly, which is driving growth in grab-and-go items.

“This is a clear sign that having the right items, in the right quantities, is a big part of optimizing deli prepared sales,” she says.

For these grab-and-go items, as well as for items such as pre-packaged meats and cheese, optimizing label information is vital, Roerink says.

“Proper labeling on prepackaged food is not only a matter of food safety and identifying allergens, but also an opportunity to give consumers transparency into all the ingredients,” she says.

Labels also provide an opportunity to call out unique attributes such as organic, non-GMO, gluten-free or local, says Roerink. “Each prepackaged item has a built in little billboard for functional and marketing messaging,” she says.

Labels that include date of expiration also guide proper rotation of products, another key to minimizing waste and optimizing efficiency in the prepared foods areas of the supermarket deli.

Retailers can drive even more efficiencies with their labeling processes by using the right equipment. Continuous feed labels, for example, offer advantages in the form of lower costs and reduced waste, compared with using multiple label formats.

The DayMark Matt77™ Direct Thermal Label Printer allows retailers to print a variety of label sizes from the same feed. The continuous roll and guillotine cutter allow retailers to optimize the length of the label to fit the packaging, this minimizing waste from trimming oversized labels.

Custom labeling includes the ability to drive brand awareness on grab-and-go items with a retailer’s logos, watermarks or other graphics. In addition, batch printing capabilities allow retailers to efficiently print multiples of different labels at the same time.

The continuous feed system also streamlines labor and eliminates the need to change label rolls for different sized labels, or to toggle back and forth between different printers to print label of different lengths.

One retail foodservice operator was able to consolidate four grab-and-go label SKUs, varying from 2 inches to 8 inches in size, down to just one, driving significant cost savings.

The new printer joins DayMark’s Matt85™ Direct Thermal Label Printer in the company’s fleet of hardware options to accompany its MenuPilot^® app. Both are available exclusively on the DayMark MenuCommand® kitchen automation platform.