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options, are struggling to meet the demands of a modern consumer base hungry for more than just another cold cut or outdated salad option.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 

Restaurants Mix and Match Meal Bundling Included Drinks and Beverages

 

Grocerant niche mix and match meal bundling that include alcohol and non-alcoholic beverages according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who recently stated, “many times the profitability of a delivery order will increase two-fold when beverages are included with the delivery order of meals or meal components.”  

With more and more new ‘to-go’ laws regarding takeout alcohol around the country Francine Cohen recently pointed out that, “today, the tide has changed. Drinks that could walk out the door with a guest back then meant the difference between life or death for a business; now they’re a unique marketing tool and a smart additional revenue stream.”

The team at Foodservice Solutions® recently found consumers want both food and beverages delivered:

1. Recent Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.8 % don’t know what’ s for dinner at 4PM.
2. 68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.
3. Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.
4. 79.6% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 66.6% have two meal components per day.
5. When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 91.3 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.4% chose meal components.
6. Seventy-three percent of retail prepared food purchases are taken to go
7. 88.2 % of consumers prefer hand held food over sit down meals with a knife and fork

Francine Cohen in an article had insights into beverages for delivery has several great examples that I will share here:

“Ka-wana Jefferson, owner of Sweet and Sweet Catch in Brooklyn, has ridden the rollercoaster from necessity to nice-to-have, and is still committed to offering a selection of drinks to-go on her menu. Sweet Catch has a menu created by Shannon Mustipher, which is designed to enhance the flavors of the menu while creating flavor touchpoints for the community’s palate.

“Since Covid it’s been a great incentive to have that additional stream,” Jefferson said. “During the pandemic it was a lifeline. It was needed, it gave us life and essentially kept us in business.”

“Sweet has been open for seven years,” Jefferson continued, “but Sweet Catch Brooklyn has only been open since the pandemic and we are open still far from out of the red, so having any revenue stream that enables us to increase growth has been essential.”

Jefferson explains how forces outside her four walls were essential for her decision to keep investing in the vessels needed for to-go drinks, “We are very connected with our community, and in talks with our merchant association, and it’s a consensus that covid has changed the trajectory of businesses.”

“Drinks to go are an additional stream that proves to be very helpful,” Jefferson said. “Truly in 2022 vs. 2020 we’re doing less to-gos, but those drinks we are doing are boosting up to-go orders and pushing people to our website. People are now able to add on that drink which they couldn’t do pre-covid. It’s a great incentive to order from us.”

That was the goal when Lisa Hawkins, Chief of Communications and Public Affairs at the Distilled Spirits Council of the United States, noted the benefits of the work she and her team did in successfully lobbying at least 18 states and the District of Columbia to allow drinks to go.

Hawkins told us what they were hearing from consumers, “At the height of the pandemic, it allowed them to support their local restaurants and bars, while also enjoying a handcrafted cocktail at home. When the pandemic hit, so many people missed being at bars and a being able to pick up a handcrafted cocktail to go was a small way to bring that experience back into their homes.”

Touching people at home is where the magic really is. In a town like New Orleans where to-go drinks have been a forever thing (except during the pandemic, but that’s a legislative story for another day), it almost seems redundant to be talking about the benefits of drinks to go, but what they discovered down there is that you can teach an old dog new tricks. And a drinks to-go program can take on a whole new meaning during the holidays, for instance as they do at Cure.

Cure Co. founder Neal Bodenheimer oversees the programs at Cure, Val’s, Cane & Table, and Dauphine’s in DC too. Many an unfinished cocktail has been put in a to-go cup at the end of the night at one of his New Orleans establishments, but Bodenheimer has created a new bar experience for his guests, one that lingers long after they leave.

That’s important at holiday time when attention is pulled in many directions – iconic restaurants where families have celebrated for years draw them back, holiday pop up bars like Miracle and Sippin’ Santa draw them in, and so he harnessed an old tradition of egg nog with a new to-go twist and started promoting his batched egg nog via Instagram and expects it to go on sale at the bar shortly after Thanksgiving.

Bodenheimer shares why they take the time to batch the nog, “Any time you can provide something that a guest can walk out of the door with, something they can purchase, you should. I’ve seen this with our book. They want that add-on purchase. I think it’s a great thing to have.”

“For the average operator you’re always looking – bars have things that are branded, and we think about a nice pen with your bar or restaurant name on it, you want them to have stuff at their house that reminds them of you. It’s the same way with these drinks you want people to bring home a piece of the bar, not just for the extra revenue, but also for the marketing,” Bodenheimer concluded.

Making the marketing work with to-go drinks is one part reputation and one part organization. Good to go cocktails can be a reminder you exist and that you’re doing something great…if you merchandise them correctly. Nick Farrell is the Spirits Director who oversees the beverage programs at Show of Hands, Caruso’s Grocery, and Irongate in DC and the bar programs at Devil Moon BBQ and Brewery Saint X in New Orleans.

During the Pandemic, Farrell sold a lot of bottled freezer cocktails that were simple open and pours and while sales have slowed down a bit, he’s still seeing 50-75 go out each week. He explains, “We could be doing a bit more but it’s not where we’re focused right now. We are selling them to the people who just want to take something home and don’t want to fuss around to have to make cocktails. They’ll come in and have a drink and – especially at our food hall – then take pizza home and grab a cocktail because it’s there.”

Farrell stocks his bottled drinks at the checkout counter. He notes, “We are purposefully putting drinks to-go at checkout – where it makes sense. And, it is easier than hand selling.”

Farrell’s commitment to glass bottled drinks is a reflection of his commitment to sustainability and drink integrity. Being able to share those values with guests is another marketing point to be made with to-go drinks.

When Jefferson started her to-go program she had branded cups, but over time shifted to standard stock options. But that leaves her, and many others who use what they buy at Restaurant Depot and places like that, with a missed opportunity. Two, actually. A missed opportunity to have their brand name in people’s hands, and a missed opportunity to do so while making a statement about their commitment to sustainability.

That’s where a product like The Good Cup comes in. After winning multiple design awards abroad, and being put to the test in bars, restaurants and coffee shops in Europe and Asia, Good Cup is bringing its environmentally sound alternative to plastic to-go cups to the US this fall.

Cyril Douret, co-founder, Managing Partner of Choose Save Planet’s The Good Cup, designed the first prototype after attending a music festival. He shares, “I was originally at the music festival where the waste from drinks was the most prominent and that was mostly plastic or paper cups with plastic lids! The vision is to remove as much plastics in the food and beverage industry as humanly possible.”

A noble effort many are on board with but haven’t had a solution for yet. Douret explains how it can be used for cocktails, “The Good Cup performs the same as a plastic cup, but actually is even better, because there is less possibility for the lid to pop off. So, if you can walk and sip with any other cup, The Good Cup will perform the same, if not better.”

Drinks to-go from Industry Spirits’ bottled cocktails with Vodka and Gin (Photos courtesy of Industry Spirits.

He continues, “Because The Good Cup uses a water based or aqueous coating on the inside of the cup, there is a certain percentage of alcohol that does best with the cup. Beer and wine are perfect at 10% alcohol content. We know straight alcohol will compromise the materials-anything over 40%. In between, the life of the cup is being tested, but has lasted up to two hours.”

Any shift to paper and or The Good Cup will make a significant shift in waste for “to-go” or “take-away” options for restaurants and bars.” Sounds like a potential option, especially as branding comes free of charge with every minimum order, and the cups come assembled in stacks of 25 or 50 which saves time when trying to get a drink out the door and maintain its integrity.

The integrity of the drink is one thing that is sacred for a bar. Much as you know a to-go meal isn’t going to be the same exquisite experience as dining in, you take out all the time; drinks run the same risks.

Andrew Friedman, founder of the bartender-owned spirits brand Industry Spirits got into the spirits business during the pandemic and leveraged his bartending and bar ownership expertise to help Washington state restaurants present great to-go cocktail offerings to their guests. He’ll come in and create a cocktail for them or work with them to adapt a popular menu cocktail for a to-go format and admits it is not for everyone.

Friedman remarks, “Nobody is doing a great job of marketing it to the customers to do it well; the servers don’t know what to do with it, you have to add it to your menu, and it just gets confusing unless it’s well managed. But when it is done right …what a to-go program can do is act as marketing.”

He concludes, “Someone is already in your business, so when you let them take home a really good cocktail and put a bottle in their freezer and then when they pull it out or open the freezer, they remember you. Instead of it being a replacement for them coming to your business, it’s a reminder about you. Every time they open the freezer there it is staring you in the face, reminding you to come back.” Ok, that said. Don’t over reach. Are you ready for some fresh ideations?

Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

Panera Bread Wants to Become a Grocerant Retailer

Building a retail food brand that garners the attention of consumers at the most common points of purchase will drive top-line growth and bottom-line profits while edifying brand value according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. If you’re building a grocerant brand you, are you building a brand for today, or tomorrow.  

It’s at the intersection of consumers never ending question; What’s for Dinner and Where to Get Dinner that they are looking for solutions according to Johnson. Panera Bread launched Panera Grocery Rewards—a national reward program that sits at the nexus of the company’s leading loyalty program, growing CPG business and in-café offerings and they clearly want to be that solution.

Here is how the program works; customers who spend $20 on Panera goods in the grocery store can scan their receipts to receive a $5 electronic gift card for use in café, and the program is slated to run through the fall.

The objective of the campaign is to create top-of-mind awareness of Panera’s grocery products, drive long term loyalty with Panera’s grocery products and encourage shoppers to visit the café.

Panera is one of the first in position to offer a program like this, with MyPanera leading the industry as the largest restaurant loyalty program with 52+ million members. Additionally, the company has steadily grown a robust lineup of packaged foods that spans over 10 categories – including refrigerated soup, refrigerated mac & cheese, refrigerated salad dressing, packaged coffee, artisan bread, refrigerated bowls and refrigerated flatbread pizza. Customers can shop a wide range of options at top retailers like Kroger, Publix, and Walmart among others.

Panera Grocery Rewards will be promoted across a fully-integrated campaign, including dedicated emails to MyPanera members, paid media across Meta’s platforms, in-grocery POP across the country and a national Planet Fitness partnership with awareness in over 2,500+ clubs.

Are you building a brand for yesterday, today, or tomorrow?

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869 

C-Stores Keys to Growing Foodservice Sales and Profits

 

Today consumers are looking for more than just a quick snack, meal, or treat they are looking to maximize every foodservice encounter with multiple solutions.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®; mix and match meal component bundling is the key driver of the continued growth within the grocerant niche.

Abbey Karel is vice president of business development for convenience at Bounteous she agrees and says, that “the line between convenience retailers, restaurants and grocery blurs, c-stores have a unique opportunity to meet several demands — food, fuel, home products and even groceries — in one fell swoop.

But to compete with quick-service restaurants (QSRs) on the food front, convenience stores will need to continue to strategically invest in and expand digital offerings.

Customer relationship management (CRM) software, loyalty apps, first-party data, consumer research and reviews can all be mined for insights, which can help inform development of a foodservice strategy.

Bounteous recently fielded research for the National Advisory Group (NAG) that revealed areas of opportunity that can help c-stores grow their foodservice footprints.

Power Upsells with Data

Bounteous + NAG research found 70% of c-store app users who place a food order are likely or extremely likely to order add-ons (beverages, snacks, candy, tobacco, alcohol, etc). This is a critical data point because the in-store shopping experience relies on the store planogram for add-ons increasing the average order value. Knowing that a strategic app experience can yield the same results as in-store can help c-stores feel confident in digital growth.

Variety is where convenience stores outshine their QSR counterparts. Where else can customers order and pay for food, snacks, gas, a car wash and beer at one time? This level of convenience is invaluable to consumers, and digital can amplify this convenience.

App users who order food are primed to make add-on purchases: 52% are likely or extremely likely to purchase candy, and about 44% are likely or extremely likely to add alcohol or tobacco products.

Whichever way customers order, c-store brands must create a successful digital flow by inserting upsells and cross-sells during the ordering process. Suggestive selling is an effective method of increasing basket size and encouraging customers to try new products. By showing images of complementary products that customers might not have considered otherwise, the customer is prompted to add additional items to the basket.

Unlock Breakfast Potential

Bounteous + NAG research revealed that 27% of survey respondents are most likely to order lunch from c-stores — higher than any other daypart. A closer look at the data, however, reveals hidden potential for the breakfast daypart: 47% of specialty-coffee app users go there for breakfast. C-store retailers already have the advantage of morning commuters filling up and have an opportunity to appeal to the breakfast crowd by building out their specialty coffee and beverage menus.

Understanding your customers’ behaviors, patterns and personas is key to maximizing the potential of your breakfast offerings and marketing strategies. Mornings are a crucial time for customers, and they want to start their day off on the right foot. By creating habits that make your customers feel happy and excited about their morning routines, you can build new loyalty and increase basket size.

Crack the Social Code

Unsurprisingly, 52% of respondents in our research said friends/family members are the biggest influence in looking for restaurant/prepared food options. Social media platforms Facebook and Instagram come in at third and sixth respectively (with Google and YouTube mixed in between).

Social media is one of the best tools that brands can use to connect with customers.

Fifty-seven percent of consumers spend more with brands they follow online — and if they do have a negative experience, 40% of the time they are more willing to give your brand a second chance than if they didn’t follow you. Understanding the relationship between your brand and consumers is the key to creative success when it comes to social media.

Simply having a social media presence — even if you post regularly — isn’t enough. It’s critical to understand which audiences use which platform, and what type of content interests them. You can’t just replicate your content on each platform and hope for success. Instead, research your target audience and followers, then analyze their behaviors on each platform and tailor content accordingly. This will increase engagement and help build a stronger connection between your brand and your customers.

C-stores have a unique opportunity to build brand loyalty and grow basket size through foodservice offerings. By strategically leveraging digital tools, customer data and overall consumer trends, c-stores can compete with QSRs and maximize their foodservice investment.

Abbey Karel is vice president of business development for convenience at Bounteous. With a background in mobile product management in retail, Karel’s focus is on deeply understanding clients’ needs to optimize global teams throughout the product lifecycle and driving strategic, long-term partnerships centered around co-innovation.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation, and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter