Grocery Stores Need More Fresh Food Sales to Survive

Legacy grocery stores continue to struggle.  Regular readers of this blog know the undercurrents driving customer migration from grocery stores to restaurants and new non-traditional fresh food outlets according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

So, we ask how is it that companies the ilk of Kroger, Albertsons, and Walmart continue to struggle integrating a customer focused fresh food strategy? Regular readers of this blog also know that over the past 12 years there are now 50% fewer legacy grocery stores.  We ask once again when will they accept the fact that they are failing to sell what today’s consumers are looking for?

Even will all the talk of On-line food sales Brick-and-mortar stores still rule when it comes to fresh foods, according to market research giant Nielsen who has been in this business long before Foodservice Solutions® entered in 1991.

In new research from Nielsen titled “Fresh & Focused: The U.S. Retailer Path to Winning Brick & Mortar” found the “fresh departments bakery, deli, meat, produce and seafood — are what’s drawing consumers into stores.

The report mirrors what the team at Foodservice Solutions® calls ‘looking like yesterday’ Nielsen found stock-up grocery trips are becoming “a thing of the past for many shoppers” as they increasingly go online for nonperishable foods, household products and pet care items.

While E-commerce today accounts for almost a third of total grocery sales growth despite representing only 4% of sales. Nielsen found that the top performers generated 43% of sales from perishable foods versus an average of 32% for the same measurement across all retailers. And for the most successful stores, the deli and produce sections made the biggest contributions to total perishable sales.

Year over year, seafood and deli saw sales rise 5% and 4.9%, respectively, across all retail outlets for the 52 weeks ended Aug. 24, according to Nielsen. Next in terms of sales growth were bakery (+4.2%), produce (+2.6%), meat (+2%), frozen (+1.7%), health and beauty care (+1.5%), and dairy (+0.6%).

Get this “This debunks the long-standing belief that the meat department contributes the highest impact to the success of the perimeter of the store. And it likely reflects consumers’ changing wellness needs, as well as their growing demands for convenience,” explained the Nielsen report.

Now for the Grocerant Ready-2-Eat and Heat-N-Eat fresh food. Nielsen found more than 75% of deli sales came from random-weight items for the top fresh retailers, signifying that they have created a “more authentic, ready-made feel” in that department.”

Once again edifying Foodservice Solutions® Grocerant Guru® findings Nielsen found that the shopping experience, including personalization and convenience, also plays a pivotal role in creating a destination, since stocking up has become less of a focus for consumers heading to physical stores. Nielsen reported that foodservice sales are up 10% year over year. If success leaves clues and it does, integrating a 2020 strategy into your food outlet is more important than ever.  Does your store look more line yesterday than tomorrow?

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, www.Linkedin.com/in/grocerant/ or www.twitter.com/grocerant/

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