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The changing economy is changing consumers’ deli and prepared foods spending patterns, according to the “What’s In Store 2010” report from the International Dairy-Deli-Bakery Association (IDDBA), which bears looking at even as 2010 progresses.
More than half of consumers say they are buying less in the deli and prepared foods areas, according to the report, and those who continue to shop there are looking for more value. In-store delis are feeling the impact, with almost one in five experiencing a drop in gross income last year [m] but that means four in five are still holding strong. Trends in thriving delis include meal deals, cross-merchandising, a return to traditional comfort foods and ethnic food offerings that match local demographics.
The highlights of the “Inside the Mind of the Deli Shopper” report include:
Taste, price/value, freshness, cleanliness and quality of deli items are the qualities consumers value most in the deli and prepared foods departments. Fewer shoppers put a high value on organic, local and imported designations than they did during boom times. Instead, they are looking for value. One shopper said, “The price per pound of deli items has increased too much, so I look for sales.” However, well-to-do shoppers continue to be attracted by healthy prepared foods programs, and many of them have actually increased their purchases of supermarket ready-to-eat and heat-and-serve meals.
Most people are reducing restaurant spending without increasing their deli meal purchases. About one-half of Americans bought meals at the in-store deli less often over the last year, with one-third doing so “much less often,” according to IDDBA research. Many shoppers say they are “more concerned about price than time right now.” Retailers will turn to more pricing tactics, promotion, menu composition and in-store aesthetics.
Return to Comfort Food
Financial instability is leading many consumers to seek consistency in other areas of their lives, and that has manifested itself in a demand for iconic deli foods — although an increasingly sophisticated consumer palate means that shoppers like a little twist on tradition. Few things say “deli” more than old-fashioned potato salad, and manufacturers report that their sales of traditional potato salads are strong. They’re also experimenting with trendier versions of the classic that feature specialty potatoes or spicy sauces. Fried chicken meal deals, macaroni salad, chowder and chicken noodle soup are strong players in the comfort category.
Comfort food, though, vary with cultures, and an area’s demographics largely determine customer cravings. Large Hispanic populations in the Southwest or the West Coast have created a demand for authentic foods from Latin American cuisines, while foods like paneer (a fresh cheese) and naan (a flatbread) are popular in areas with large Indian populations.
Hot trends in deli equipment include multipurpose pieces that use space efficiently, save energy and allow delis to more easily merchandise their products. Several manufacturers offer multi-temperature cases for cross-merchandising frozen, refrigerated and nonperishable items. And, to save energy, they are developing LED (light-emitting diode) systems for service cases. LEDs use much less energy than fluorescent bulbs, have a longer life span and produce less heat, resulting in long-term savings all around.
Convenience, looks, durability, food safety and the environment all come into play when consumers weigh the pros and cons of different packaging. Deli operators and suppliers must also factor in a patchwork of local packaging laws when choosing containers. Several American cities have outlawed polyester trays for use in the deli, and have banned or taxed some types of takeout containers. Plastic tub packaging continues to win over consumers because it is easier to handle than zip bags and vacuum bags.
Cross-Merchandising Complete Meals
Cross-merchandising — either by bringing non-deli foods into the deli or bringing deli foods to other areas of the store — is a hot trend. For example, Supervalu has launched “Simply Good Meals,” which displays meal components in cases that are positioned in several spots throughout the store, including the deli, meat and produce section.