Tuesday, January 26, 2010

It’s a great time to be a grocery store or supermarket deli!

Unemployment in the US is stuck at a unproductive level and economic conditions don’t’ appear to be improving on the street. While consumer spending is in a funk, restaurants continue to see declining sales. One are of upside is the grocerant niche with fresh prepared foods better for you food that is portable and ready-to-eat or ready-to-heat. They are found in abundance in the grocery and supermarket deli’s.

Bill Cross and the excellent staff at Food Business News and Broad Street Licensing recently said this.
“Grocers are seeing 7-10% growth in sales of prepared items, largely at the expense of restaurants. In the past, grocery stores had been losing out steadily to restaurants, with 48.5% of total food expenditures in 2008 spent away from home. Now things have shifted, with the National Restaurant Assoc. estimating restaurant sales will be off 1% in 2009 (conservative if you ask me).

In order to attract the restaurant customer, Albertsons has pegged their in-store prepared foods to the slogan “Simply Good Meals,” grouping foods together for easy menu combos and placed in the “4:15” sections in line with the time busy shoppers are looking to put together dinner.

Southern California chain Stater Bros. is adding two kinds of meatloaf for those wanting “comfort food,” but also offers carnitas and chicken teriyaki.

With trips to the supermarket steadily declining, the challenge for retailers is to keep value and not resort solely to price cuts. Chains like Stater Bros. and Albertsons have slashed prices 20% on many items, and have reported lowered earnings as a result, though some chains like Kroger report profits up. The leader in providing prepared meal innovations is Tesco-owned Fresh & Easy who features a line of meals intended to feed a family of four costing just $8. While the category can be popular and lucrative, retailers are sometimes unsure how to capitalize. Consumers think the foods are prepared on-premises (they aren’t), and some shoppers resist paying premium prices for no-name or store-branded prepared foods, so moving beyond five varieties of egg or potato salad can be a strain on supermarket supply lines.

Finally, attracting good food prep talent to work in a supermarket has been an uphill battle.But expect more market share and "share of stomach" to go to the grocerants.”

Need a grocerant program review or grocerant assessment? Contact Foodservice Solutions of Tacoma, WA the global leader in the Grocerant niche. More about Steven Johnson: http://www.linkedin.com/in/grocerant or www.grocerants.blogspot.com

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