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Sales during lockdown a mixed bag for deli

After an initial coronavirus surge, sales in the deli department are dropping

Michael Browne, Executive Editor

April 20, 2020

4 Min Read
Deli counter_web(G).jpg
While meat and cheese sales at the deli are up, prepared foods have seen steep declines since the onset of the coronavirus crisis.photographereddie/IStock/Getty Images Plus

As coronavirus began to take hold in mid-March, retail grocery experienced a huge surge in stock-up shopping across the entire store, covering center store and all fresh categories. But within fresh, some categories did significantly better than others. Even with a bump at the outset of the pandemic, as lockdowns nationwide began to take effect, in-store deli has been struggling.

While initially increasing sales by up to 15.9% year-over-year for the week ending March 15, according to IRI date, it was clear that the deli department was trailing other fresh categories. During that same time period, the total fresh perimeter was up 45.1%, with meat (76.7%), dairy (60.0%) and bakery (78.8%) leading the charge. Meat, in fact, would continue its unabated rise with a 91.3% year-over-year increase the following week (ended March 22), while deli flattened to a 1.3% increase. And that would be the last good news for the deli department for a while.

Deli sales growth April 5.png

While it’s not all doom and gloom for the deli — meats and cheeses are up — the decline in prepared foods is taking its toll. During the first week of April, the deli department experienced year-over-year sales increases for cheese and meat, but deep declines for deli-prepared as many stores had closed or limited operations of made-to-order counters, self-serve buffets, salad bars and hot bars.

Related:Retail meat sales remain robust during coronavirus crisis

Working with 210 Analytics LLC’s president Anne-Marie Roerink and IRI, the International Dairy Deli Bakery is releasing weekly sales trends reports during the COVID-19 crisis. Here are the most recent highlights on the deli category:

Deli meat

Random-weight deli meat sales increased 6.2% in dollars over the week of April 5, with volume sales up 1.5%. Deli meat sales peaked three weeks prior, increasing by 40.5% year over year (week ending March 15). It appears disproportionally more of the deli meat dollar is going to prepackaged meat amid COVID-19 sales. Both volume and dollars for prepackaged deli meat were up significantly more than that of random-weight deli meat.

“Over the past few weeks, many retailers have taken safety measures that have closed cut-to-order counters and instead are providing prepackaged inventory for easy grab-and-go, but still in random weight,” Roerink noted. Shoppers commented on the importance of finding a way to provide both package size variety and the ability to customize even with the cut-to-order stations closed. Some retailers have ramped up their online meat/cheese deli ordering system to provide customization without the in-store interaction.

Related:Grocery a bright spot in record March retail sales decline

One shopper commented to the Retail Feedback Group’s Constant Customer Feedback (CCF) program, “Lunch meats and cheeses were precut and already packaged. This was great, so much better than prepackaged! But both the pre-sliced cheese and lunch meat are close to a pound each. Is it possible to have some smaller packs maybe a quarter pound or half pound?”

Deli meat and cheese sales April 5.png

Deli cheese

Random-weight deli cheese sales increased 6.2% over the week ending April 5, with a slightly higher gain in volume. “Just like seen in deli meat, packaged cheese in the refrigerated aisle increased significantly more, at 40.9%,” said Angela Bozo, education director with IDDBA. “With the total sales of prepackaged cheese being more than seven times bigger than random-weight deli cheese, the much higher increase signals significantly higher absolute dollar gains. Just like seen in other areas of the store, packaged cheese is in demand, likely driven by higher everyday demand, click-and-collect orders, speeding up the shopping trip and sheer availability.”

Cheese was another area with continued stockouts the first week of April. Shoppers commented on substituting based on availability. One shopper on the Retail Feedback Group’s Constant Customer Feedback (CCF) program commented, “Blocks of cheese in dairy case were mostly sold out. Settled for pre-sliced cheese squares.”

Deli prepared food decrease April 5.png

Deli-prepared foods

As even more grocery retailers closed prepared food options, the total deli-prepared category plummeted by just over 43% versus the same week last year. Sales were off for virtually all offerings and meal occasions, whether breakfast items, combo meals, trays or deli pizza.

“As the first waves of panic buying are over, measures to curb the number of people going in grocery stores combined with a slowdown in trip frequency is really hurting the deli prepared area,” said Eric Richard, industry relations coordinator with IDDBA. “The only area that experienced growth were holiday meals with some retailers offering heat-and-eat Easter meal solutions.”

For our most up-to-date coverage, visit the coronavirus homepage.

 

About the Author

Michael Browne

Executive Editor, Supermarket News

Michael Browne joined Supermarket News in 2018 after serving in managing and executive editor capacities at leading B2B media brands including Convenience Store NewsLicense Global and Travel Agent. He also previously served as content production manager for print and digital in the Business Intelligence division of Informa, parent company of Supermarket News and Nation’s Restaurant News.

As executive editor, Mike oversees the editorial content of supermarketnews.com as well as the monthly print publication. He also directs all content-based brand-related projects including the annual Top 75 Retailers report, Category Guide, Retailer of the Year, research surveys and special reports, as well as podcast and webinar content. Mike has also presented and moderated at industry events.

In addition to the positions mentioned above, Mike has also worked as a writer and/or editor for special projects at American Legal Media (ALM), managing editor for Tobacco International, special projects editor at American Banker • Bond Buyer, and as production editor for Bank Technology News and other related financial magazines and journals published by Faulkner & Gray.

A graduate of Fordham University, Mike is based in New York City, where he was born and raised.

Contact Mike at [email protected] or follow him on Twitter and LinkedIn.

 

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