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Using Center Store To Boost Foodservice Sales

The Harmons Holladay Market in Holladay, Utah, features a Lunch Deals Daily and “What’s for Dinner?” case that holds a range of by-the-pound prepared foods and bakery items as well as center store items down below.
The Harmons Holladay Market in Holladay, Utah, features a Lunch Deals Daily and “What’s for Dinner?” case that holds a range of by-the-pound prepared foods and bakery items as well as center store items down below.

Power of Foodservice at Retail 2018, part 1

by Lorrie Griffith/editor-in-chief

In part one of our coverage of the Food Marketing Institute’s (FMI) “Power of Foodservice at Retail 2018” report, we are focusing on the first of the top 10 findings: Focus on conversion.

There is great opportunity to convert grocery shoppers into deli/foodservice/prepared food shoppers, the report found.

When shoppers are in a rush to get dinner on the table, 52 percent prepare a meal that takes little time or effort; 33 percent buy from a restaurant; and just 14 percent purchase foodservice items from the supermarket. When they’re not in the mood to cook, 69 percent of consumers buy from a restaurant; 31 percent find their solution in retail foodservice.

Rick Stein, VP of fresh foods for FMI, pointing out that restaurants are twice as likely as retail to end up with the business, said, “There’s a real opportunity for food retailers to awaken the 68 percent of shoppers who say the grocery deli is simply not on their radar and to inspire the 32 percent who said their store doesn’t necessarily meet their culinary expectations.”

According to the report, shoppers typically visit the supermarket multiple times per week, but they buy grocery deli prepared food only every three weeks. Combining scratch cooking with convenience items is the most popular dinner preparation technique at 55 percent, a boon to value-added meat/produce and foodservice (a sole reliance on semi- or fully-prepared item is less common, at 8 percent).

Convenience-focused solutions are defined as items that may require reheating or cooking, but are pre-cut, pre-seasoned, heat-and-eat or ready to eat. These may be sold in foodservice, or in the meat or produce departments. Younger shoppers are more likely to integrate convenience-focused items, which likely means a growing role for foodservice as a meal component or full meal solution in years to come.

But a piece of advice to help with conversion today? Cross-promote foodservice items with center store to draw shoppers with time-saving solutions.

“To capitalize on the demand for convenience, retailers can help shoppers in their mix-and-match tendencies by connecting foodservice items back to the center store or other perimeter departments, starting with items that have high household penetration, such as deli-prepared chicken,” the report says.

Deli-prepared chicken most often leads to the additional purchase of deli appetizers, sides, desserts and salads. Deli-prepared pizza, on the other hand, has strong connections to purchases of paper goods, food storage items and water.

Fresh solutions needed

Eric LeBlanc, director of channel marketing-deli for Tyson Foods Inc., a deli department supplier, points out that quality, freshness and value all factor into a shopper purchasing a convenience meal at the supermarket.

“Meal” is the part of that phrase that sometimes gets lost in the drive for the retailer to sell more rotisserie chickens or other centerpiece item.

“Retailers wants to take things out of boxes and put them on the shelf and sell a lot of them; they’re trying to sell the thing they just bought. But the shopper doesn’t want that, the shopper doesn’t want a rotisserie chicken; the shopper wants dinner,” he said. “That’s a solution that we, in many cases, have not even tried to offer shoppers. Even when we have offered it, in many cases, at least, we’ve done a poor job offering it.”

LeBlanc cited a statistic that 80 percent of all rotisserie chickens sold are purchased by just 1.6 percent of the people who cross the threshold of the store.

What that tells you, he says, is that these people who are buying with that great frequency have figured out how to make a meal from that starting point.

“They’ve got the ‘life hacks’ to make that work in their lives, so they buy frequently. People who haven’t got those hacks don’t buy frequently,” he said. “Where we tend to go as an industry is we’re going to complete the meal for you: Here’s rotisserie chicken, your choice of two of five sides (potato salad, coleslaw, corn, whatever else), some rolls and a beverage. That’s a meal.”

However, it’s “not a meal people are going to get very excited about and not something they are going to repeat very often because it doesn’t excite. If you look at the No. 1 reason for purchasing food from the prepared foods department, the consumer is trying to purchase something that will please their family and that they’re proud to serve. It’s the No. 1 driver of purchase intent.”

So how does a grocer leverage the center store (and other departments) to help consumers make the meal they’re looking for?

One thing grocers need to keep in mind is that they are the masters of customization.

“When people think about Chipotle or similar restaurant operators, it feels fresh and it’s great that they get to customize. I want this, that and that…When you go into a supermarket, there are 40,000 SKUs; talk about the ability to customize! There are hundreds of interesting, delicious, fun meals with the other stuff that’s in the supermarket.”

Because freshness is a key attribute shoppers are looking at today, a natural department to look to for cross-merchandising is one department that generally is right next to the prepared foods area—produce.

“When you talk about quality, freshness and value, what feels better than the greens, reds and yellows in that produce department? If you can bring some of those products into the meal solution, you’ve really got something going,” LeBlanc said.

There also is a wide range of boxed rices, risottos and other starches “that are fantastic as well as great vegetable items. There are sauces that are fantastic, bagged salads, salad dressing—all this stuff that you can go across the whole store and give people ideas for how to make that rotisserie chicken or whatever other items they’re buying really interesting and fresh and exciting and something they really want to serve their family.”

So while the grocer may want to use the whole store for meal options, “you can’t cross-merchandise the whole store,” LeBlanc pointed out.

That’s where communication comes in.

“The secret, I believe, is that it isn’t about merchandising—it’s about communication,” he said.

And that communication needs to take place both before they shop and as they shop. Shoppers need to know that you can give them “simple ideas for dinner tonight,” he said.

And he debunks the notion that people will only stay within the deli area itself to pull that dinner together.

“If people are on a mission, they can easily and don’t mind walking to an aisle that’s a few aisles over. We’ve got this idea that it all has to be from one place or it’s got to be within three steps or they won’t buy it. They walk the whole store now anyway. They tend to do it on the perimeter, but if they’re on a mission and it’s worth it, I believe they will go.”

So, the issue is giving them ideas to make the mission worth it.

“Let’s say there are five recipes featured this month for prepared foods items. You could have, for those shelf items, wayfinders or arrows coming off the shelf that say ‘For Tonight’s Recipe’ or what have you,” LeBlanc said. “There are ways of working inside the store to direct people and give them exactly what they need.”

He also envisions a new, more exciting type of kiosk that would offer the recipes. The shopper could choose a recipe and a QR code would appear that the shopper could scan and get a list of the items (preferably a short list) that they would need to make the meal.

“Ideally, if you have beacon systems in the store, it can just walk you through: ‘Your next item is on aisle 8,’ for instance. The trick is make it fast, easy—everyone knows that, but make it feel fresh, make it feel exciting. Stop talking about the stuff! In my opinion, it’s not even about just how do I make this food something I’m proud to serve, but get past that; the real emotional advantage is that after the meal, there’s a relief, a resolution of tension that we feel good as a family because we had dinner together,” he said. “There’s a ton of benefits to having family dinner together—kids score better on standardized tests, they do better in sports, they have more confidence, all these kinds of things.”

Retailers that are using social media or other digital communication with customers outside the store will need to talk about these solutions on those forums before the shopper even sets foot in the store.

“Prime that pump on a pre-shop basis, and then if that message is reinforced with some kind of signage or electronic communication inside the store, that’s the way to gain traction,” he said. “We have to keep it from being about the stuff because the stuff isn’t really what drives purchase, it’s that emotional payoff that drives purchase. Once you put this system in place, what you have is a reason for people to come to your store and a reason for you to have 40,000 SKUs.

“Think about the shopper and the meal and you’ll win. We all win when the consumer wins.”

The Power of Foodservice at Retail 2018 report was prepared by 210 Analytics LLC and sponsored by Hussmann Corp. and The Shelby Report.

Continue on to Part 2: How To Become The Prepared Foods Destination Of Choice

Keep reading:

What QSRs Can Teach Grocers

Weigel’s Latest Location Focuses On Made-To-Order Foodservice

Meat Institute Unveils ‘Beefshi’ Recipes For Foodservice

About the author

Lorrie Griffith

An observer of the grocery industry since 1988. Away from her editor job, she's a wife and mother of two grown sons and thinks cooking is (usually) relaxing.

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