Not long ago, some retailers jumped onto what they hoped would be profitable trends for them. Today, those operators are a little surprised -- even downright elated -- that their foresight was 20/20.
Convenience continues to drive sales of easy-to-use products in fresh foods. And the power of brands, while not new, has shown more muscle than was expected. The draw of small, affordable luxuries can't be underestimated either -- even in a gloomy economy, retailers told SN.
A case in point has cooked up incremental dollars for the specialty cheese department at Price Chopper Supermarkets, Schenectady, N.Y., where the sales success of premium butter merchandised alongside French cheeses has surprised everybody there.
"These premium butters are drastically more expensive, but our sales of a Vermont-made premium butter are up 60% year-to-date, and a premium Irish butter right now is outselling it two to one. Those are all significant sales for something that's never been on ad," said Michel Bray, specialty cheese manager at the 102-unit Price Chopper. "There's a different consumer today, one who has disposable income and who understands quality."
Taking chances has had a positive sales impact in all fresh departments. Among the concepts that have worked are:
D&W Food Centers, Grand Rapids, Mich., rolled out in-store Starbucks units to twice as many stores, in half the time planned, after the coffee brewer quickly became a star in the 26-unit chain.
West Point Market, Akron, Ohio, was surprised that a "comfort" cookie, at a premium price, could be such a popular seller.
Ukrop's, Richmond, Va., is running out of space for its ever-growing line of ready-to-heat -eat entrees.
At Price Chopper, premium butter got its debut a little more than two years ago, but it wasn't easy convincing top management it would be worth it, Bray said. The Vermont-made product got its chance as a test in Price Chopper's 14 Vermont stores.
"In Vermont, it was phenomenal. Shoppers feel a strong connection to local products there, but it was only a couple of months later that our customers in New York, who had traveled to Vermont on vacation or over the weekend, started calling our main office to ask why they couldn't get that butter here," Bray said.
At that point, the company authorized all Price Chopper stores to carry it in their specialty cheese departments. Now, they also carry a French sea-salt butter and an Irish premium butter, with retail prices of more than $3 for eight ounces. A locally made garlic butter will be added this month, and a premium Danish may be next, Bray said.
"All my butters have surprised me as to the amount of sales I get out of them, unbudgeted. That's why I'm looking to bring in possibly two more. No other supermarket in our market is selling premium butter."
Sometimes a good thing turns out to be a great thing, and that's what happened when D&W Food Centers entered a partnership with Starbucks. Supermarkets across the country have been pairing up with Seattle-based Starbucks ever since the company began to spread eastward a few years ago, but D&W had the distinction of putting in the first licensed Starbucks coffee bar in Grand Rapids. There weren't even any freestanding, corporate-owned Starbucks there.
"Its been a very big win for us, as indicated by our commitment to put it into 11 sites in a very short period of time, much faster than we had expected," said Tom DeVries, director of deli-bakery-food service.
"We dipped our toes in the water in December 2000, and quickly realized the branding element that Starbucks brought to the table. We quickly put it in 10 additional units. Initially, our success target was, 'Hey, it would be great if we could get four or five of these going.' But now we've got 11, and we're looking at a couple of other possibilities by the end of this year, and some future sites as well," DeVries said.
D&W has called the concept successful in three respects: financial and image return, and incremental store traffic. Most important, the financial return has been on target and better, DeVries said.
While D&W promoted the grand opening of its first Starbucks heavily -- even putting up a countdown sign at the construction site -- they haven't done much promoting since then.
"There's no necessity to make a huge marketing blitz. By the time we opened the second one, we just put up a sign and turned the light on."
Until just this month, D&W was the only supermarket in Grand Rapids to have a Starbucks. Now, Grand Rapids-based Meijer Inc. has one under construction there.
At single-unit, upscale West Point Market in Akron, Ohio, its older, well-to-do clientele is accustomed to buying premium products, but the company wasn't at all sure they would embrace what West Point Chairman Russell Vernon calls "comfort cookies."
Vernon said, "We held our breath, waiting for our Chubbies, or 'cookiewiches,' to take off. Our Opals [older people with active lifestyles] and our Suppies [senior urban professionals] normally don't go the comfort-food route, but they like these. We sell them individually in our cafe, and we go through hundreds weekly."
"Comfort food" may not be the term everybody would apply to these cookies. In silhouette, they may resemble an Oreo, but they definitely have an up-market flare. Between two double-chocolate, moist cookies that are about two and a half inches in diameter, one Chubby features a little more than a quarter inch-high filling of Marscarpone cheese with a touch of vanilla. The other variety, made with peanut butter cookies, has a stuffing that's a mixture of peanut butter and honey. They're $1.25 each.
"They're a money maker, and as people try them, sales keep growing. We make them in our [on-site] bakery," Vernon said.
While the consumer world is indulging in little luxuries, its quest for convenience also is unrelenting. In fact, some retailers expressed awe at just how much convenience they can sell.
One meat manager at a Midwestern chain said he's still amazed that people will pay for cooked bacon.
"I never thought that anyone would buy already-cooked bacon when they can buy a whole pound raw for what they pay for a couple of ounces of this, but we sell lots and lots of it," he said.
And Ukrop's Super Markets keeps adding space in its meat cases for national-brand, ready-to-heat entrees.
"What surprises me is that sales of them continue to grow at such a rate. They've grown 20% a year for the last three years, and they just keep on going. Every time we reset our cases -- and we do it at least every six months -- we add more room. We just added four more running feet of multi-deck the last time we reset, bringing it to 16 feet in some stores," said Alan Warren, meat and seafood director, for the 26-unit independent.
He added that in an effort to provide even more space to accommodate the burgeoning category, he has just added some spring-lock shelves that enable him to display a few more facings.
All of that is particularly notable for a retailer that pioneered the production of fully cooked entrees, as well as sides and salads, in its own central kitchen. But there's absolutely no cannibalization of those, Warren said.
"It's all additional sales. People pick these up to have on hand when they need them. They have a longer shelf life and recently there's good variety."
By improving variety and quality and educating consumers, manufacturers get credit for spurring sales in a number of growing categories.
"They've educated consumers. It used to surprise me that we sold so much tofu, but in soy's defense, [suppliers] have actually taught people how to use it, how to cook with it," said Rudy Dory, owner, Rudy's Newport Market, Bend, Ore. "Really, if you were to just open a package of tofu and try it, it doesn't taste like anything. But even I eat it now."