Rising Prices Fuel Sales Growth Across All Fresh Departments

CHICAGO – April 21, 2011 – New research from the Perishables Group reveals rising food prices were a primary driver of increased sales in the fresh departments of U.S. supermarkets last year.

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.

Fresh department sales comprised a growing percentage of total store sales in recent years.  

In 2010, the deli led all fresh departments in sales growth, increasing both dollar and volume sales by 4.5 percent.  

The reports attribute a portion of the deli’s success to 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 reports, the in-store bakery’s 1.6 percent dollar growth can be attributed 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% of dollars and 29% of volume were accounted for by value-added.

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