Retailers are working to take better advantage of the promotability of frozen food on more of a year-round basis. They are getting some help from manufacturers in the task, but the main obstacle to exploiting frozens' high promotability is the retailers' challenge alone: space. Frozen food executives interviewed by SN said that, where they can, they are expanding display space, but often they are faced with a freeze on department square footage, or even a reduction.
Their tactics include:
· Adding item counts in weekly ads, and squeezing in bigger displays to back them up.
· Taking full advantage of buy-one-get-one-free offers, multiples and other discounting vehicles;
· Concentrating on slower months to try to extend the sales momentum gained from seasonal events.
"The peaks and valleys are moving out of frozen food," said the vice president of grocery for one of the top 10 retail food chains in the United States. "They're not just a winter or summertime item anymore. We promote frozen food 365 days a year."
Save Mart Supermarkets, Modesto, Calif., is expanding space for frozen food in its new stores and increasing ad space devoted to the category, according to Pat Brooks, director of frozens, dairy and deli.
"A lot of retailers have not given frozen food the attention they need to. It is an opportunity department," Brooks said.
"In the last couple of years, very generous allowances have been coming out of manufacturers. That has made promoting frozen food more profitable," said Scott Rzesa, director of dairy and frozen foods at D'Agostino Supermarkets, Larchmont, N.Y.
Tom Outlaw, director of frozen food at Ingles Markets, Black Mountain, N.C., said, "We are looking at trying to have more spikes [in sales] in the frozen food department. We want to spike sales with special promotions in between the [traditional peaks] such as Easter, Christmas, Fourth of July."
Here is what retailers had to say about promotional merchandising in frozen food:
Lee Salo buyer-merchandiser
Raley's Sacramento, Calif.
Some of our stores have extra end bunkers, some have extra uprights for promotional display of frozen food, depending on store space for the category. Up to 15 frozen food items are promoted weekly, some for one week, some for four weeks.
We find that promotion of frozen food results in three to six times the normal weekly movement. The categories that are especially worth promoting in our market area are orange juice and dinners.
Frozen food sales are about the same all year in this part of the country, but to even out the peaks and valleys even more, we can improve space allocation for frozen food. The problem is, in-store space is the biggest obstacle to promotion of the category. We deal with that by adding freezers in remodels.
Half-price sales and multiple purchase pricing are the most effective promotions for frozen foods.
Tom Outlaw director, frozen foods
Ingles Markets Black Mountain, N.C.
We devote two endcaps for frozen food merchandising. We have them in all of our new stores. These endcaps are in 75% of our stores. I don't foresee any increase in promotional space in the near future.
Every week we will have four main feature items and eight subitems from the frozen food category. Those features are effective one week. We also feature four frozen food items a month in our TV ad program, and those prices are in effect for three weeks.
We think the promotion impacts the whole frozen food department. A strong ad will bring customers into the department, helping all categories and total sales.
Our most promotable frozen categories are, No. 1, ice cream and, No. 2, pizza. Those are items used by a large percentage of customers.
A variety of different promotions will work. Sometimes retailers have too many options from vendors. Then the retailer has to narrow the choices down to what he thinks will be productive for that time of year.
We use a variety of promotional techniques. BOGO (buy-one-get-one-free) ads have been very effective for us. But just putting a hot price on an item that customers use every day, such as a well-known brand of orange juice, is the most effective promotion.
Pat Brooks director, frozen, dairy, deli
Save Mart Supermarkets Modesto, Calif.
On average, we have an end cabinet in the department for items on promotion and an upright freezer on the front end for seasonal items. In our newer stores we may have as many as four end cabinets and one or two uprights in strategic locations in the store. In our new stores we are increasing the total frozen food space by 25% to 30%.
When we went to upright freezer cases we put in two uprights facing each other down the aisle. Our aisles average 72 to 76 feet, so that comes to 144 to 152 linear feet. Those uprights have five shelves and a well. Now we have taken that same space and added a dual island coffin case with a split in the middle, which gives us four end bunkers.
In the past we have featured seven frozen food items per week, but effective this quarter (April, May and June) we are increasing that to as many as 10 to 14 items per week.
Ice cream is one of the most promotable categories in frozen food. The average half-gallon of ice cream has a higher dollar ring than most frozen food. If you are looking for dollars, that will give you a dollar lift, maybe more so than a unit lift. It will also give you units. On average we will feature ice cream for $2 on ad, sometimes in multiples such as three for $6. We feel that has increased our sales by running it at a multiple price.
Response to a frozen food promotion can be affected by temperature and timing of the ad. If the temperature is 5 degrees higher, for example, it can double sales.
In-store space is the biggest obstacle to promotion. We make sure we have all the categories covered, but sometimes we have to limit distribution.
We have been experimenting with multiple pricing. We have also done BOGOs but we have done more with half price promotions rather than BOGOs.
Bob Kopplin frozen food buyer
Dan's Supreme Supermarkets Hempstead, N.Y.
Each of our stores has one rolling freezer case that measures about 3 by 4 feet for promoting frozen food. We typically promote 15 to 20 frozen items in a week. Probably 20% of total department sales would be promotional.
The most promotable categories are vegetables, pizza and breakfast items.
March is a peak sales period because of Frozen Food Month. October is also good. We would like to be consistent year-round with sales, but then suppliers would have to put the same effort into everyday business that they do in March. A lot of manufacturers save up all their promotional dollars for March.
All of those promotional activities -- couponing, BOGOs, multiple purchase discounts, full brand discounts and total category blitz -- have been tried by us at different times and they all work.
It has become harder to promote frozen food, because as we build new stores we are losing space for the category. Frozen food as a department is shrinking a little. The business has not been at its peak for the last five to six years.
Bill Campbell frozen food buyer
Associated Food Stores Salt Lake City
Our independents are being pretty aggressive with frozen food right now because of the margins involved.
We are supplying 10 different retail advertising groups. Each promotes at least four to eight frozen items a week. We see real diversity in the items being promoted.
Bagels have become a good promotable item in the frozen category. Other categories that are most effectively promoted are juice, dinner entrees and ice cream. We are showing growth in the high-end dinners like Stouffer's and Marie Callendars more than the diet-conscious.
We see a big peak for frozen food sales in the holidays and during March Frozen Food Month. April is one of the lower months. Moving into summer there will be a change in the type of items promoted. We see a big surge in the hot weather.
Right now, BOGOs are very strong. This market is very price-sensitive. Reduced price is still the main avenue for promotion of frozen food.
Promotion of frozen food is very hard. Our biggest problem is size of store and amount of space that can be allocated to frozen items. Some stores have bought extended freezer units that can work as an end display.
Mark Polsky senior VP
Magruder Inc. Rockville, Md.
Typically each store has two to three endcaps for promoting frozen food. In one store we have tried a multideck endcap and it is great. If we can replace some of the older endcaps, we will do that.
We try to feature two to three items a week. When we promote any particular item, sales increase about seven to eight times. We run hot features.
Frozen vegetables and juices are probably the most promotable categories in our market. The holidays are great for sales. Summer is a little slow because of the fresh food that is available.
Probably the biggest obstacle to frozen food promotion is space in the store. Our stores do a lot of volume but are relatively small in size. It becomes a question of giving up something to put in more frozen food.
We feature single items at a hot price. That seems to work for us.
Promotion of frozen foods is becoming easier. Manufacturers understand that by and large promoting frozen food is no different than dry grocery. They seem to be coming to the table with better promotions.
Scott Rzesa director, dairy, frozen foods
D'Agostino Supermarkets Larchmont, N.Y.
Our stores are in the city. We don't have endcaps for frozen food. All of our selling space is regular sales space.
Frozen food is promoted weekly. It makes up about 20% of our total sales program. Our promotions usually run one week, sometimes two weeks.
Results vary by item. With certain categories, we will see seven to eight times the volume on promotion. But many do not. On average we are looking at a three- to four-time movement increase on promotion.
Frozen food categories that respond best to promotion include entrees, breakfast items and ice cream.
In addition to National Frozen Food Month in March, we do a large frozen food promotion every September which we call our September Freeze ad. Between September and March is a key selling period for frozen food (because) that is typically when our larger customer base is coming back into the city. In the summer, frozens sales drift, but that is made up by ice cream, which gains about 30% of the entire department's sales in the summer period.
In terms of effective frozen food promotions, we run a large number of full brand discounts or full line promotions, for example, featuring all of Stouffer's or all of Weight Watchers' entrees. We will give customers the choice of the entire brand.
Vice president of grocery
Top-10 chain
We try our best to get a minimum of four 3-foot sections in a coffin case or four 2-foot doors in an upright case for promotional display of frozen food. In some stores this space would be on an end, in others it is within the set.
I think we have adequate promotional space, assuming all the stores are doing as directed. The problem is getting that focus 365 days a year.
We promote four frozen items every week on average. We see promotion as an opportunity to pull customers into the department and get them to shop the entire case.
We see a significant sales increase in response to promotion. We can have a dramatic impact if we have the right item. In such a case, a seven- to eight-times volume increase is conservative.
In our market area, ice cream and novelties are important. We try to play to the individual marketplace and appeal to demographics with our promotions. We don't waste our time promoting the same items in every market area.
We still get a bump in March for Frozen Food Month. In October we do another frozen food promotion and get a rise out of that. Those promotions only bend the base. Our frozen food sales continue to stay high for a couple of months after a big promotion.
Space limitations in the case is an obstacle. It is like trying to fit a size-nine foot in a size-six shoe.
There is a lot of bundling in frozen food operations, such as offering three for $5, two for $4. Retailers really have the opportunity to pick up volume from time to time by using those.
Promotion of frozen food has become easier because it is producing results. A category that is trending flat can increase by seven to eight times when on promotion. A category that is trending upwards, that is showing growth, can go 10 to 12 times its normal movement in a four-week period on promotion. We can sell through 40 weeks worth of inventory in four weeks, depending on the item.
