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IBSS:  Price Sensitivity Returning in 2011

IBSS: Price Sensitivity Returning in 2011

BOSTON — The retail landscape in 2011 will look very different from 2010, Steve Lutz, executive vice president of the Perishables Group, said here at the International Boston Seafood Show.

In the seminar "Supermarkets 2011: Looking Ahead at Seafood Retail Performance & Consumer Trends," Lutz said that after two years of low inflation in 2010 and parts of 2009, price inflation has returned in 2011, and the Perishables Group is seeing signs of renewed price sensitivity among consumers.

Lutz said 2011 might actually resemble 2008. "We know there was great price sensitivity in 2008, and going into 2009 it backed off, but we think the combination of rising prices and this lingering impact of the recession, gas prices as well, you will again see that price sensitivity emerging among consumers.

"It's really critical to understand what drives retail success because we see a variety of outcomes at retail" that can vary by department, category and subcategory," he said. Some of those elements vital to understand are merchandising, assortment, pricing and consumer demographics.

Understanding these elements is especially important in seafood departments. "One of the things we observed in the seafood industry is the seafood industry is not as active in understanding the dynamics of success than what we've seen from the suppliers and the retailers involved in produce and meat and bakery."

Lutz stressed the importance of "getting the right items at the right store at the right price" and assortment analysis. He also observed that supply-side leadership isn't as active in seafood as it is in other departments.