Retail in-store deli channel: "Super deli" to the rescue
“Super deli” to the rescueIt’s the perfect premise for a reality TV show: real people seeking help for vexing problems. Moreover, because every family is different, the solution must fit the given situation.
Now entering its fourth season, ABC’s “Supernanny” has become that ideal reality show. Millions watch as British nanny Jo Frost crisscrosses the nation, taking on some of its toughest parenting challenges.
In their own way, retail in-store deli departments address similar issues. They provide quick comforting aid and custom solutions for people and families facing meal decisions.
Among those studying meal solutions and the wider foodservice market is Ron Paul, president of Chicago’s Technomic Inc.
“Consumers have moved well beyond basic deli items,” he says. “They want retailers to deliver all-inclusive meals - including entrees, sides, beverage and dessert. Lighter lunch offerings also hold strong consumer appeal. . . . This is clearly a competitive threat to many chain restaurant brands.”
Echoing those sentiments is Harry Balzer, a vice president with The NPD Group, Port Washington, N.Y.
“For years, supermarkets and convenience stores were outlets for ‘packaged foods,’” he notes. “But the growth of the restaurant industry during the past 25 years - and especially the growth of take-out meals - has shown everybody in the food market that consumers now want ‘packaged meals.’”
According to NPD Group/CREST data, foodservice operations at retail outlets - including convenience stores, supermarkets, discount stores and price clubs - have posted stronger foodservice traffic growth than any other segment of the restaurant industry. This amounts to 8 billion meals and snacks that were bought at retail during a 52-week period ending May 2007.
NPD said that although total restaurant traffic grew by 3 percent from May 2005 to May 2007, foodservice purchases at retail stores outperformed the total industry with 5 percent growth in the number of meals purchased for immediate consumption.
Those sales are adding up. The International Dairy-Deli-Bakery Association (IDDBA), Madison, Wis., estimates that prepared deli foods now generate sales of approximately $5 billion per year.
IDDBA examined the trend more closely for its annual What’s In Store report. According to this year’s study, attributes of health and wellness, preferred tastes and convenience rate as the top deli purchase drivers. In a survey, 71.9 percent of consumers said supermarket delis are more convenient to visit than restaurants, 62 percent said supermarket delis offer healthier options and 55.8 percent said supermarket delis provide “fresher food and ingredients.”
About half of those consumers surveyed said they would buy more food from the supermarket deli and hot food stations if there were greater selection. Interestingly, more than half of consumers purchase meals at the deli on impulse when they already are at the supermarket buying groceries.
These comments aren’t lost on retailers. The nation’s largest association of food retailers and wholesalers, the Food Marketing Institute, recently surveyed its members about store construction and design.
When it came to new features, most retailers said they are adding areas for ethnically diverse or gourmet food items such as specialty cheeses, gourmet coffee/espresso, shrimp bars, creperies and artisan breads.
Asked specifically about added convenience features, most operators not only talked about expanding foodservice (deli) but adding more soup bars and sandwich express/sandwich carving stations.
Speaking of sandwiches, IDDBA notes that consumers are more likely to have first tried such breads as focaccia, ciabatta and flatbread at restaurants than at supermarket delis. That suggests deli operators may benefit from more prominent marketing of sandwich breads, both through signage and by featuring them in specialty or signature sandwiches.
IDDBA said more than a third of consumers surveyed would be more likely to visit the deli if it offered a different specialty sandwich each day. Growing sandwich concepts include:
- use of artisan and ethnic breads and rolls;
- hot sandwiches for dinner, cold sandwiches for lunch;
- ethnic sandwiches including panini, Cuban sandwiches, Indian vegetable turnovers and Jamaican beef patties;
- sandwiches sold by the pound;
- oversized specialty bread sandwiches for parties;
- meat carving sandwich stations;
- use of premium and aged meats and specialty cheeses, such as sliceable Brie and cave-aged Blues.
IDDBA noted that the service deli is seeing more SKUs shift toward premium national and regional brands, and away from premium store brands. Nearly three in 10 consumers (29 percent) say they are paying more attention to brands across all deli categories. IDDBA says shoppers who frequently look for brands in the deli are most likely to say that that brand means better quality and taste.