38 feature | deli CONSUMER PERISHABLES DATABOOK 2016
For the past several years, the deli department has been the growth engine of the store, with an annual dollar growth rate of seven percent each year since 2011. Fueled by the consistent growth
of deli prepared foods, the department maintained this
upward movement during the latest 52 weeks ended Feb.
27, increasing dollar sales seven percent compared to the
previous year. Not far behind in growth and importance,
though not as frequently discussed, are traditional deli
meats and cheeses, which increased dollars a respectable
six percent, respectively.
Many retailers use their delis as a key point of differentiation, and in doing so must have a working knowledge of the increasingly diverse competition outside of
the store. Recent Nielsen research reveals a correlation
between a higher share of perishables sales from the deli
and higher total perishable dollar sales per store each
week. Yet how these retailers achieve their high share
of deli sales can vary depending on their shopper. While
most conversations about deli focus on the prepared section, a robust offering of gourmet prepared products may
not be the right strategy for every retailer. It is imperative
to understand the department’s role for your consumer
and store, and execute the strategy accordingly, instead
of trying to cater to all consumers and all occasions.
There is no single, cut and dried strategy for winning
deli consumers and sales. Weighing the needs and circumstances of primary consumers with a store’s specific capabilities can help retailers and manufacturers develop tailored strategies for success as long as they are delivering
on convenience for shoppers. Yet as consumers seek more
varied types of food and meal solutions, the deli can play
a critical role in addressing changing consumer needs.
Finding the Right Strategy
Delivering convenience to the consumer differs depending on who is in the store and where they live. Different
prepared entrées are more widely purchased by different
demographics depending on factors such as price, quality
and novelty. For example, deli dips like hummus and deli
appetizers both index highly with more affluent shoppers.
However, deli dips are more often purchased by younger
households while deli appetizers appeal to older house-
holds. Understanding which consumers to cater to is vital
in keeping deli a growth engine for the entire store.
Deli basics are critical to developing any deli department. A store without the capability or demand for
a robust deli prepared program is better positioned to
focus on basic staples like deli service cheese or deli bulk
meat. Shoppers look for these staple products throughout
the day and all days of the week. These staples are also
widely connected to many categories across the store and
can serve as a catalyst for growth in stagnant areas when
paired with the right connections such as bakery bread.
For stores with the demand and capability to develop a
more robust deli-prepared category, focusing on products
that compete directly with local foodservice offerings can
drive more grocery trips. Understanding the true competition, whether that’s quick-service restaurants, fast food
or home-delivery services, can impact the quality and
Regardless of which strategy is employed, the best
deli strategies merge consumer demand with department
capabilities. By tailoring your deli to serve your focus
consumer, the most basic or most complex department
can maintain growth and innovate to meet changing consumer needs.
The best deli strategies merge consumer demand with