CHICAGO -- Retailers are always on the lookout for ways to reduce labor in their hands-on perishables operations. In the produce department especially, trimming and culling individual items to maintain the fresh image requires a huge portion of an individual unit's labor hours.
Case-ready items have helped relieve the labor dilemma. Prepackaged salads, precut vegetables and myriad other ready-to-eat produce offerings have come on line aimed at consumer convenience with fresh-meals marketing messages. This simplified approach has meant that supermarket operators can not only enjoy the increased sales -- spurred by these new entries -- but also significant labor savings, since the tedious, and costly, hand work has been all but eliminated.
During the recent holiday season retailers have enjoyed similar benefits with specialty gift programs in the produce department. Many retailers are aggressively developing new sourcing strategies for seasonal items -- ranging from dried fruit and nut trays to fruit baskets -- in a further attempt to shrink labor at the department level. The result has been a trend toward outsourcing segments of the fruit-basket category in a manner that best suits the operation's labor strengths.
At Roger & Marv's, a Supervalu operator located in Kenosha, Wis., the fruit-basket offerings are available in two guises. One is a premade vendor-supplied line; the other is a custom-designed made-to-order in-store variety. During the peak holiday selling period, fruit baskets were put center stage at the front end.
An associate built custom baskets on the selling floor the week prior to Christmas. The premade, vendor-supplied baskets were merchandised adjacent to the active demo, ready for customers to pick up their selection and head to the checkout.
"Sales of fruit gift baskets were real good this year," said Don Murawski, produce manager. "The baskets accounted for 20% of department sales during that single week. We try to do as much as we can in-store. But during the prime holiday season there is no way for us to keep up with demand."
The demo method of merchandising not only created customer awareness of Roger & Marv's fruit-basket program, building the baskets on the sales floor punctuated the fresh image, Murawski said.
Because of high sales volume and the need to maintain artistic quality, Murawski deepened his premade, vendor-supplied commitments this past year.
"Staffing really helped me make that decision," he said. "We simply did not have enough people. You can't just hire somebody off the street to make gift baskets. The fruit has to be stacked properly for customers to be happy with their selection and confident with their gift."
The basket menu includes eight styles, plus special customer requests, he said.
Marketplace, Sikeston, Mo., has also employed a certain percentage of premade, vendor-supplied fruit baskets, according to Jeff Turner, produce manager for the store, which is situated across town from its parent, Food Giant. Sales have steadily climbed since the premade baskets were introduced two years ago, he said.
"With the vendor-supplied baskets there is not as much overhead," said Turner. "Not only have we reduced labor, but inventory costs."
The line of distinction between the two methods depends upon the customer's order. Here, traditional fruit offerings are slotted into the vendor's program. More demanding custom orders, such as wine and cheese selections, or a popular beer and peanuts offering, are produced in-house. Custom and special orders require a two-day notice for production.
During the holiday season, the vendor-supplied items are merchandised in-store on a big front-end display, where two to three basket varieties are placed in groups of two or three. Preholiday ads are used to feature the fruit baskets, and artful photography also draws customer attention to the variety of items.
"Seeing the display and the ads, customers realize that fruit baskets are a good gift-giving idea," said Turner, adding that the sale becomes more difficult after they see the price.
"The sticker shock of seeing a $20 to $50 price on custom baskets often drives them into the $20 to $25 premade items. The premade offerings, with labor and inventory costs removed, help us offer a value and sell more product," he said.
Commodity pricing also affects fruit gift sales, Turner said. Depending upon market conditions, the price of fruit has a definite influence on the price of baskets in relation to case sales. With this year's advantageous pricing of apples, there was an increase in case apple sales over the holiday season, as well as basket sales, he said.
More importantly, both retailers have found that fruit-basket programs can become a viable option beyond traditional selling times.
"If you put an effort into it, the fruit-basket business can be year-round," said Turner. "In some of our units, particularly those by hospitals, we do move fruit baskets throughout the year."
Roger & Marv's has successfully expanded its holiday fruit basket-selling season into an all-year operation, and has used it to expand its customer base beyond the in-store shopper. Many local florists have been contacted to offer the supermarket's basket program as a contract source for fruit baskets.