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Supermarket retailers can collectively improve sales by as much as $300 million annually if they would adopt optimal promotion strategies en masse, according to a recent study by the Alaska Seafood Marketing Institute (ASMI).
Having analyzed sales performance of 60 large and midsized food retail chains in three major Alaska seafood categories – wild salmon, cod and crab (king, snow, and Dungeness) – the Juneau, Ak.-based ASMI discovered several opportunities worthy of note, in particular a direct correlation of "best-of-class" (BOC) retailers' wild salmon sales with better total seafood department sales performance.
After scoring retailers on a five-point scale in the areas of fair share performance; department share; sales velocity; promotion (time frames, frequency, depth of promotional discount); and retail price, retailers were then sorted based on performance to compare the 10 best BOC retailers against the 10 lowest-performing retailers. In addition to the correlation of BOC retailers' wild salmon sales with better overall seafood department performance, the ASMI study found that when wild salmon was offered on a year-round basis at the seafood counter, sales of both wild and farmed salmon improved.
Moreover, ASMI's retail seafood study also found a significant opportunity to offer wild salmon as a fixed-weight frozen item. Retailers that expanded their offering to additional species, such as keta or pink, experience better frozen seafood performance.
Other highlights of the ASMI study* found:
- BOC retailers promoted salmon more frequently over longer time periods but at smaller discounts for overall better sales and profit performance.
- BOC retailers in cod sales generated better total finfish category sales.
- BOC promoted cod twice as often and at slightly larger discounts
- BOC in cod sales generated better total finfish category sales
- There's a big opportunity to improve cod sales using BOC methods
- BOC practices could generate sales improvement in all three crab species
- BOC in snow crab sales generated better total shellfish category sales
- BOC in snow crab sales generated better results in total shellfish category sales
The key takeaway of the study, according to Larry Andrews, ASMI retail marketing director, is that there's substantial opportunity to improve the performance of retail seafood departments by adopting the strategies of the BOC retailers. In particular, Andrews added, most retailers could benefit from a thorough assessment of salmon, cod, and crab categories.
*Encore Associates of San Ramon, Calif., conducted the study, which compared sales for the 52-week period ending Oct. 6, 2013, and which covered the continental United States, using information from data management company IRI/Fresh Look.