Fresh Food Competition Grows

September 21, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | CPG & FMCG | Data-driven | Food & Restaurants | Radio | Retail & E-Commerce

nielsen-grocery-fresh-sep-20111.JPGWhile the grocery channel continues to dominate the fresh food channel in the US, competition from other channels is growing, according to September 2011 data from The Nielsen Company. During the 52 weeks ended Q1 2011, grocery retailers accounted for about two-thirds (65%) of fresh food sales in the US.

Remain markets and mass merchandisers/supercenters tie for a distant second with 13% share of the fresh food market each, with club retailers taking the remaining 9% share. However, grocery has lost 0.1 of its fresh food share year-over-year, while remain markets have lost 0.2% share, mass merchandisers/supercenters have gained 0.1% share and club retailers have gained 0.2% share.

Fresh Foods Lone Bright Spot for Mass/Supercenters and Club Stores

Nielsen analysis indicates fresh foods have been the only departments posting sales increases in the mass merchandiser/supercenter and club channels, up 1.1% in mass merchandisers/supercenters and up 1.9% in club stores, driving their respective fresh food share growth.

Freshness, Quality, Variety Can Spur Grocery Sales

nielsen-grocery-channels-sep-20111.JPGNielsen advises grocery retailers looking to take back fresh food market share to focus on prepared foods, which was the only deli category to show year-over-year growth in Q1 2011 (+3.5%). Leading products in this category by share of sales include prepared chicken (25%), salads (18%), sandwiches (11%) and entrees (also 11%).

In terms of year-over-year growth in dollar and unit sales, dips/spreads/toppings (12.3%) lead in dollar sales growth while platters (14.3%) lead in unit sales growth. None of these products reported negative growth in either dollar or unit sales, pizza had the lowest growth in both areas.

Grocers Can Take Advantage of Perimeter Sales in Center Store

Nielsen also advises grocery retailers to take the following three steps to take advantage of perimeter store sales to boost center store sales:

1. Assist the shopper’s decision-making process. Nielsen recommends grocery retailers educate shoppers with in-store displays and online education with respect to origin, nutrition, growing trends and recipes. In-store product samples can also be effective introductions to new products.
2. Drive impulse buys in bakery and deli. While bakery and deli are less likely to trigger a trip, Nielsen says grocery retailers should find ways to drive impulsive or reminder purchases.
3. Optimize center store strategies. When meat is in the basket, it is likely to be joined with meal starters and side dishes. Bakery purchases are often accompanied by deli meats and cheeses as well as condiments. Produce is often joined by fish and meal starters. Nielsen advises grocery retailers to understand these synergies to build shopper basket size.

Harris: Freshness Most Important Food Purchase Factor

About nine in 10 (89%) adult US consumers say freshness is an important factor when making a food or beverage purchase, more than say any other factor is important, according to April 2011 Harris Interactive data. Fiber and whole grain follow with an 81% importance rating each, and factors such as fat content (80%) and portion size (79%) are also important to most consumers.

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