DELI: CHANGING THE MENU

ROBERT VOSBURGH

Supermarket retailers moved closer this year to finding the right balance between outsourcing and store preparation. In so doing, they made important decisions regarding product mix, and the way it's presented to shoppers. The effort also produced fringe benefits since the initiative bolstered their commitment to customer service and enhanced their own image.

In traditional deli, the phenomena was apparent as more chains introduced private-label slicing meats and cheeses to the case, presenting consumers with premium-level items manufactured by third parties to the retailer's specifications. The list of retailers actively promoting their own brands covered large and small operators: Safeway aggressively expanded its Primo Taglio line into new markets; Winn-Dixie introduced its own Ridgemoor Provisions label; and wholesalers like Topco Associates reported increasing demand for its private-label line by its independent operator members.

Sandwiches became popular again. Supermarkets with strong lunchtime programs enjoyed booming business, and were watched with increasing envy by quick-service restaurant chains. Several burger-focused QSRs, like Arby's, were among those who liked what they saw on the retail side, and announced plans to add sandwiches to their menus.

Retailers also borrowed from food service. Almost imperceptibly, supermarkets are slowly implementing more restaurant elements that place them in a better position to compete for stomach share. More stores are adopting proven winners like wing bars and Mediterranean bars, and tightening their existing fresh-meals programs to highlight only best-selling items like rotisserie chicken. Even here, the emphasis is on outsourcing product, so the store can focus on selling the food, rather than making it.

The gourmet cheese case received more attention, and in some instances, went full service in markets where the customer base is more upscale. Retailers who invested in cogent signage, educated associates and product variety found profits. Artisan varieties from small producers added excitement with interesting textures, unique flavors and quirky stories. Consumers found goat cheese decorated with real flowers, cheese tortas, lemon Stiltons and a host of other cheeses enhanced with something extra.

The convenience factor also took on new meaning for retailers. Looming on the horizon, the specter of convenience stores emerged as a stronger threat than previous years, as the quick-stop formats added hot food stations, seating and other meals-friendly elements to their store footprints. Shell/Texaco opened Select units in the Houston area, complete with fountain stations and grab-and-go cases; BP is reserving up to 1,700 square feet of space at its gas stations for the Wild Bean Cafe, a quick-service, sit-down dining concept that's being rolled out to additional market areas after a successful test launch; and regional player Crown Central Petroleum opened a drive-through c-store in suburban Atlanta that offers 4,000 stockkeeping units -- including deli, fresh bakery items and even produce -- all accessible via window service.