Grocery stores often have two distinct halves, the middle of the store where the packaged food is kept and the perimeter of store where the meat, dairy and fresh produce are located. Both areas have their strengths and top sellers, but as fresh foods have grown in popularity – thanks to the desire for natural, fresh, healthy options – the industry has responded. In fact, over the last eight years, supermarkets have spent $15 billion growing their freshly prepared options in order to increase sales of items along the outer perimeter of the store.
Has this investment in perimeter of store been worth it?
The good news for retailers is that the answer appears to be yes. New research from the Food Marketing Institute (FMI) and Technomic, released this month, indicates that 64 percent of stores surveyed saw a growth rate of nine percent or more in their prepared foods category. The survey queried 8,000 stores across 28 different banners, and the data clearly shows that customers are placing a higher value on freshly prepared offerings than on meals that come from a box.
“It’s clear that food retailers are differentiating their businesses by leveraging fresh-food selections to meet shopper demands for convenience, all while counterbalancing declining center-store sales,” says FMI Vice President, Fresh Foods, Rick Stein.
Technomic’s Principal Wade Hanson points out that businesses offering consumers easy-order options also profited from increased sales. “Sixty-two percent of supermarkets participating in this research now offer customers made-to-order stations along the store perimeter, but select supermarkets have incorporated limited-service or full-service restaurants into their physical footprint.”
You can find the complete FMI/Technomic report (10 Findings on Fresh Prepared Foods in Grocery Stores) at http://www.fmi.org/freshfoods. Inside, you’ll learn more about how in-store market offerings partner with foodservice, price perceptions of consumers, the role of deli foods in prepared sales, and how this sales growth compares to the total store. It’s an interesting read, so get your copy today.