Rising Prices Fuel Growth Across All Fresh Depts.

Rising food prices were a primary driver of increased sales in the fresh departments of U.S. supermarkets last year, new research from the Perishables Group reveals.

The information was released in the Perishables Group’s new Department Drivers reports, which combine point-of-sale supermarket data, consumer demographic profiles, shopper loyalty card data and secondary research to determine the most important factors impacting fresh department performance.

In 2010, the deli led all fresh departments in sales growth, increasing both dollar and volume sales by 4.5 percent, attributable in part to a growing assortment that better meets the needs of a diverse consumer base. For example, between 2005 and 2010, the number of deli cheese flavors increased by 56.8 percent, while new ethnic and spicy flavors drove growth in deli meat.

The in-store bakery grew dollar and volume sales last year, but its share of fresh sales was flat at 8 percent, according to the Perishable Group’s recent reports, which found the in-store bakery’s 1.6 percent dollar growth attributable in part to bakeries carrying more gourmet products with higher price tags.

Produce led in customer loyalty with the average consumer purchasing from the department 31 times last year. Nearly half of baskets contained multiple items from the department.

“The produce department is unique in a store because all households purchase from the department,” said Bruce Axtman, Perishables Group president and CEO. “It’s a major driver of customer traffic to a store, and consumers showed that they are willing to spend money on fruits and vegetables even as prices increase.”

The meat department accounted for the largest portion of fresh food sales; however, prices increased the most of all fresh departments. This fueled declines in the number of households purchasing from the meat department and the frequency of purchases per household. The bright spot in the meat department was value-added fresh meat; of all increases in fresh meat, 18 percent of dollars and 29 percent of volume were accounted for by value-added.

For more information or to purchase the Perishables Group Department Drivers reports, e-mail [email protected] or call 773.929.7013.