Improved presentation, more ad space, expanded grab-and-go options and enhanced variety are just a few of the ways that retailers are making it easy for customers to think about choosing store-prepared foods for meals at home.
And, despite the floundering economy, such actions in most cases have helped keep sales stabilized or growing — albeit slowly.
It's a tough row to hoe as the recession leaves its mark, but retailers told SN they're currying the category and have faith in its future because shoppers are still time-stressed as well as financially stressed.
Stauffer's of Kissel Hill, based in Lititz, Pa., was enjoying double-digit growth in its well-developed meals program this time last year, but sales have leveled off during the past several months.
“Prepared foods now are slow to even with 2008,” said Mike Huegel, deli-bakery buyer for the three-unit independent.
READY TO GO
But Huegel, like others who talked to SN, sees a bright future for the category and is taking steps to keep sales going.
“We've devoted a weekly section in our print ad to ‘The Kitchen,’ which features rotisserie items, fried chicken, sushi, a selected entree and sandwiches.”
He added that store-made soups will join the advertised items this fall, and a popular wrap sandwich line will be expanded.
It would appear that opportunity looms large for retail prepared foods, as fewer people eat out in restaurants. But many consumers have tried to save money by cooking at home.
Therein lies retailers' most recent challenge: Emphasizing the convenience of ready-to-eat and ready-to-heat food vs. cooking at home.
“Prepared foods at retail need to bridge two gaps,” said Neil Stern, senior partner at McMillan Doolittle, a Chicago-based retail research/consulting firm.
“They need to demonstrate that they provide a better value than eating out at restaurants while also showing that they can be a more convenient option than cooking from scratch.”
Several retailers say they're doing just that. They're calling attention to how convenient it is to pick up ready-to-eat or ready-to-heat food at the supermarket. And, what's more, they're showing customers that selected prepared meals, including sandwiches, cost very little extra, compared with what they might try to make in their own kitchens.
Just bringing attention to the category is a start.
Chef James Conroy at nine-unit Super Foodtown stores, Middletown, N.J., told SN he's relying on presentation and variety — and a revved-up schedule of demos — to get customers' attention.
His open kitchens are a selling factor, he pointed out.
“We're saying every day, ‘Look, we're preparing this excellent meal right here in this store,’ and our customers appreciate that.”
Super Foodtown also introduced new variety to its menu with a line of summer salads, and has invested in no-fog clamshell packaging to display all entrees and sides.
“It costs more, but you can see the food. It's appealing.”
The company has been doing well with the category, Conroy said. One of its stores saw a 24% increase in prepared-food sales this summer vs. the same period a year ago.
“That was during a stretch of some wonderful beach-weather days. Most of our stores are on the Jersey Shore,” Conroy explained.
He's putting a focus on basics, and packing up smaller portions.
“We do very well with turkey with stuffing and meatloaf with mashed potatoes, but add new things frequently.”
Just turning up the volume on variety can be an attention-getter, some retailers said.
Publix Super Markets, Lakeland, Fla., prides itself on having something for everybody. In fact, an ever-increasing variety is a hallmark of this chain's ready-to-eat and ready-to-heat food.
“The great thing about Publix is that we have a meal plan to meet your entire family's needs and budget. We focus on offering our customers variety and allowing them to decide which option best works for their family and lifestyle,” said Publix spokeswoman Maria Brous.
At Stew Leonard's, based in Norwalk, Conn., customers are practically enveloped these days in store-made foods, packed up for grab-and-go. The variety is almost overwhelming.
SN noted earlier this month on a visit to Stew Leonard's in Yonkers, N.Y., a run of chilled, prepared entrees that extended at least 20 feet. The selection included just about anything anyone could think of, from grilled sliced sirloin steak, to cheese enchiladas, to stuffed peppers, to Maryland-style crab cakes, to pulled pork, and a clamshell package of six pulled pork sliders on tiny buns. Everything was random weight, most priced at $5.99 per pound.
Right across the aisle, another long run of chilled, store-made food included tall stacks of sides, soups and dips.
THE SPICE OF LIFE
Variety is definitely key to keeping sales up, said Jimmy Higdon, owner of Higdon's IGA, Lebanon, Ky.
His area of the country has been hit particularly hard by the recession, but his “home cooking” is surviving, he said.
“Some people are cooking at home. We've seen some healthy meat department sales, but with our prepared foods, we know we influence buying with variety,” Higdon said.
“We have a new deli manager who makes sure there's always something different on the hot bar. Customers can always count on a big old pot of pinto beans and another of green beans, their favorites, and then we have rotisserie chicken and meatloaf, but we also cook up some different things every day.”
Higdon has also added more self-service items.
With more attention to early evening business, the store has kept prepared-food sales stable.
“We're doing OK, just OK, but there were people who didn't think we'd even be here after the big-box store [a Wal-Mart Supercenter] moved in just a mile away. Considering what's been going on, we're doing all right.”
A retailer in another part of Kentucky told SN his sales in deli and bakery are doing well.
“Prepared foods and bakery are fine since the first quarter this year,” said Adam Baldridge, store manager at K-VA-T-owned Food City, Louisa.
He attributes some of that to promotions and packing smaller portions.
“But also people just are buying more. I think the recession is showing some signs of recovery.”
Naturally, in these hard times, retailers have employed a lot of “value pricing” to lure customers to their prepared foods.
James at Super Foodtown more than doubled his sales of meals, usually priced at $5.99 each, when he offered a deal — two for $9.99 for a 30-day period.
Some people took extras home and froze them, he said.
“Sales stayed up after the special ended, too. They dropped back a little, but not to their former volume.”
Wegmans Food Markets, based in Rochester, N.Y., has been offering a store-cooked meal for $6.
On the chain's website, the first page that comes up shows a color photo one of those meals, coconut-almond crusted tilapia with pineapple salsa. Then there's a list of choices. Entrees include pulled pork with barbecue sauce, and boneless grilled garlic lemon chicken. Sides include appealing options such as a combo of asparagus, jicama, corn and red peppers, and sauteed zucchini with tomato and basil.
One upstate New York consumer said she picks up one of those dinners two or three nights a week.
“It is only $6 for a complete meal and I get my choice of four proteins, fish, chicken, pork or beef, and a choice of two of their wonderful sides,” said Mary Pazahanick, an Elmira resident and long-time Wegmans shopper.
“I couldn't prepare a meal like that for $6,” she said.
Another independent supermarket has just launched $6 meals.
“We've been packing up a smaller meal. In fact, we just got the new packaging two months ago [which holds smaller portions],” said Don Relstab, store manager at single-unit Pennington Market, Pennington, N.J.
“We have to be careful what we put in them so we can make a little money, but none are retailed over $6,” Relstab said.
Pennington's sales are pretty good, he added.
“Sales started coming up after the first of the year. August is always a terrible month, but we expect sales to go up again in September.”
Even as they try new ways to put ready-to-eat and ready-to-heat entrees and sides in the spotlight, retailers also are promoting sandwiches in new ways.
With both value pricing and convenience on their minds, what better item for retailers to promote than a foot-long sub sandwich for $5, or how about $3.99?
“The Thriftway group has introduced a good deal in May, a foot-long sub sandwich for $5,” said Tom Evans, general manager and president of Hank's Thriftway, Hillsboro, Ore.
“Norbest came out with a package of pre-sliced, pre-weighed meat for sandwiches. We assemble them here on artisan bread, pack them up and sell a couple hundred a week at $5.”
Huge yellow signs hanging in the deli call attention to the $5 deal, giving customers a choice of roast beef, turkey or ham on their sub.
Nine-unit Quillin's in LaCrosse, Wis., offers a similar promotion at an even lower price, featuring a foot-long sub for $3.99. The grocer is promoting it on three billboards around town.
“It's called the Mighty Quinn, after our mascot leprechaun Quinn,” said Tony Doering, Quillin's deli manager.
“We sold 800 of those the first week.”
An illustration of an updated version of Quinn is shown holding a huge, overstuffed sub sandwich.
“It's very wise to offer specials on subs right now because they've been so successful,” said Harry Balzer, vice president, The NPD Group, Port Washington, N.Y.
“Just look at Subway: They've brought a lot of people in.”
Doering told SN that Quillin's is also making changes in its hot and chilled prepared-food programs that will emphasize value and convenience.
A number of sources in the industry told SN there's plenty of opportunity ahead for prepared foods at retail.
“The category continues to be a huge opportunity for the grocery industry, since most people continue to be time-starved,” said supermarket veteran John Pazahanick, partner in Merchandising By Design/Design Associates, Carrollton, Texas.
“I think supermarkets have some real advantages in this category that they need to aggressively exploit.”
“Nobody is looking to cook more, no matter what they say. They want to eat in their homes, but they don't want to cook.”