On July 30th, we participated in the second in series of webinars with PMA (Produce Marketing Association). This webinar featured a panel of 5 retailers discussing the innovations and incredible work and commitment their companies have undergone in the past four months to support their communities and maintain operations. The webinar was great on many levels addressing numerous complexities and I highly recommend checking it out in the webinar library here.
With continued uncertainty in some many parts of retail operations, one of the things I enjoyed the most from the panel was their diverse viewpoints on where we are going and how we are going to get there. At their base, all grocery stores sell food, but the way they chose to merchandise, their product selections and offerings all serve to differentiate; it is logical that grocery stores will approach safety and, it must be said, the perception of safety differently. There are numerous inputs, varied by regionality, customer base and a myriad of other factors. The way forward will be paved with multiple perspectives and frankly, multiple correct answers. It is up to us as an industry to continue to offer a platform for those ideas so that we can all make decisions with the most information possible.
A few things from the webinar that are on our radar- lunch traffic, refrigerated meal growth, advancements in packaging and the increase in technology as it relates to our departments.
Paul Kneeland, Vice President, Fresh Operations, from Gelson’s Markets said, “We lost our lunch.” This is a critical point that we have been suspecting while looking at the deli data from March 2020 to the present. As in delis across the country who have spent the last decade and more driving traffic to their delis for midday meals, honing offerings, adding venues and incentives have lost most those sales dollars. In the interim, it is not as easy as investing in the technology for sandwich ordering to make it up as a growing culture of working from home means that people are less likely to venture out in the midday for a lunch item. Voni Woods, VP of Deli, Bakery, Prepared Foods, from Giant Eagle spoke about the challenge of translating the hot bar to e-commerce regardless of the meal occasion. They have had some success with the refrigerated soup category, but, as she joked, not really the best subcategory for summer sales. Gina Johnson, Assistant Category Manager-Sandwich, Salad, Cold Meal Solutions, from the Kroger Co concurred, adding that we need to continue to be creative with packaged assortments as they are clearly winning right now.
Do delis move forward offering prepack everything? Will that appeal to the current environment where many shoppers are consciously attempting to shop less frequently? This is another interesting point about fresh being a driver and decision-making metric but also being a liability depending on sheer number of trips in a household. How will prepared foods balance this going forward? We have seen growth in the refrigerated meal category as of the last month. It remains to be seen how much this growth can and will offset the lunch loss.
Sarah Long, Deli/Food Service Director of Merchandising Operations, from the Albertsons Companies, spoke about highlighting the role that they feel robotics will play in the future. She specifically noted that “touchless is the future” and a shift that they believe will carry on after the pandemic is over. The sheer amount of innovation and growth over the last quarter in e-commerce advancement alone is proving that technological solutions will remain relevant. Robotics should translate into more offerings around efficiency, and safety to say the least.
What are you paying attention to in the delis? Are there plans to bring hot bars and salad bars back? What else would be helpful? We may not have the answer quickly, but we are committed to finding answers and keeping information flowing, so all feedback welcome!
Lastly, the trend line is starting to stabilize. Deli sales, while still below last year, are trending up. These sales mean that we are learning, pivoting and continuing to so what our industry does best- feed and support people.
Watch part one of this two-part webinar series here. You can also read my other blog that accompanies that webinar by following this link.