Saturday, November 2, 2024

The Service Deli Disconnect: How Grocers Can Rethink Fresh, Tackle Food Pricing, and Reignite Customer Engagement



In today’s dynamic food retail landscape, grocery store service delis, once known for their quality, convenience, and fresh food options, are struggling to meet the demands of a modern consumer base hungry for more than just another cold cut or outdated salad option. Consumers desire for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food consumers to grow according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Today, shoppers prioritize convenience and value over the traditional grocery run, delis are failing to inspire loyalty due to service issues, inconsistent food pricing, unappealing displays, and the overuse of bland, brandless packaging.

For service delis to regain relevance, grocery store operators need to transform their approach to fresh food, prioritize the shopper experience, and standardize high-value touches that enhance brand loyalty. Here, we’ll discuss key pitfalls grocery service delis face and provide eight strategies to reshape deli departments for improved customer experience and profitability.


1. Service and Availability Concerns

Many service delis fall short when it comes to the basics: staffing and efficient service. A common customer experience includes long lines, limited product availability, and undertrained staff. A report from FMI (The Food Industry Association) indicates that 63% of shoppers now prefer prepared foods, especially during evening hours, yet many service delis fall behind in meeting peak demand. Chains such as Kroger and Safeway have been criticized in customer feedback for failing to keep deli items stocked during high-traffic hours, leading to missed opportunities and frustrated shoppers.

2. Inconsistent Pricing Frustrates Shoppers

Inconsistent pricing remains a major deterrent to frequent deli shoppers. For instance, while rotisserie chickens may be competitively priced at one store, they can cost significantly more at another within the same chain. According to a NielsenIQ report, nearly 75% of consumers report feeling frustrated by unpredictable pricing in grocery stores, especially in the deli section, where meal components often come with unexplained price hikes. Walmart, for example, has adjusted prices on certain deli products based on demand cycles, but this practice can create a negative impression of ‘nickel-and-dime’ pricing tactics.

3. Unappealing Fresh Food Displays

One of the central appeals of a service deli is its fresh, inviting display. Yet too often, grocery service delis fail to deliver. It’s not uncommon to find empty trays or food that looks tired and dried out, with lighting that does nothing to enhance the appeal of the product. According to FMI, 45% of consumers who would otherwise purchase from a deli department have left without making a purchase due to stale or poorly displayed food. For instance, while Wegmans has long been heralded as an innovator in fresh food merchandising, many other chains lack the visual appeal necessary to pull shoppers in.


4. Brandless Packaging Dilutes the Experience

Many delis have leaned heavily into brandless, generic packaging in a bid to reduce costs, which strips away a valuable layer of differentiation. In the age of unique brand experiences and personalized shopping, food packaging plays a critical role in creating a sense of quality. A Nielsen report on consumer shopping habits found that 60% of consumers say visually appealing packaging strongly influences their perception of quality. Stores like Whole Foods understand this, using distinct branding and eco-friendly, aesthetically pleasing containers that enhance both the shopping experience and brand loyalty.


8 Ways Service Delis Can Become Customer-Focused and Improve

To stay relevant, grocery store service delis need to reimagine their approach and prioritize the needs of today’s consumers. Here’s how they can make immediate, impactful changes:

1.       Offer Transparent, Standardized Pricing Across Locations
Consistent pricing for popular deli items, such as rotisserie chicken or sandwiches, across all store locations, will help build customer trust. For example, Target has managed to build loyalty by offering consistent prices across its food offerings, creating transparency and trust with shoppers.

2.       Implement Peak-Time Staffing Solutions
Service delis need well-trained staff during peak hours to meet the demands of time-starved shoppers. Introducing cross-trained personnel from other departments during rush times or offering deli pre-order options can help manage the crowd and reduce wait times.

3.       Emphasize Display Quality
Regularly refresh displays to ensure that food appears fresh and appealing. Chains such as H-E-B excel at food presentation with attractive displays that make deli items look fresh, clean, and inviting. Leveraging vibrant lighting and frequent restocking can create a sense of abundance, encouraging more purchases.


4.       Develop Branded Packaging that Enhances Quality Perception
Transition from plain, generic packaging to branded containers that reinforce the store’s quality message. Walmart’s Great Value brand has used branded packaging to enhance the perception of quality in its products, contributing to a higher rate of repeat purchases.

5.       Optimize Fresh Food Inventory with Data Analytics
Using data analytics to track popular items and optimize production can reduce waste and ensure popular deli items remain in stock. Kroger, for instance, has made strides in inventory management by using customer data to anticipate demand spikes, keeping deli counters stocked with crowd favorites.

6.       Offer Prepared Meal Solutions for Different Occasions
Expanding beyond simple cold cuts to offer bundled meal kits for various occasions can elevate the deli experience. Wegmans has pioneered this approach, providing easy-to-prepare options that cater to specific meals like “Game Day” or “Movie Night.”


7.       Create “Fresh Daily” Programs to Highlight Quality
Adding a “Fresh Daily” label or messaging can reassure customers of a product’s freshness and increase sales. Food Lion, for example, uses this tactic across its departments, signaling to shoppers that items are prepared and restocked daily, improving customer perception of quality.

8.       Incorporate Self-Service Kiosks for a Quick, Seamless Experience
Self-service kiosks are increasingly popular for their convenience. Safeway, for example, has started implementing kiosks for quick deli orders, allowing customers to skip the line and grab pre-prepared meals and components easily.

Think About This

Service delis can be one of the most profitable and consumer-relevant sections in a grocery store, but they’re at risk of becoming obsolete without proactive change. By focusing on consistent pricing, appealing displays, and quality packaging, grocery delis can enhance the shopping experience, align with modern consumer demands, and secure a loyal customer base. Through a commitment to customer-centric service and innovative solutions, grocery store delis can transform from a point of frustration to a destination of choice in today’s fast-paced food retail environment.

For international corporate presentations, regional chain presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert, and public speaking will leave success clues for all. For more information visit GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869 



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