Deli remains a strong segment for grocers

Although the deli sector needed to make adjustments during the early days of the pandemic, the segment as a whole did well the past few years, and that prosperity continues into the summer of 2023.

The supermarket deli department sector recorded about $4.3 billion in sales in March of 2023 and $45.1 billion in the 52 weeks that ended April 2, according to the International Dairy Deli Bakery Association (IDDBA).

“In deli so far this year, sales were up around 5.9% from the first quarter in 2022,” said Whitney Atkins, vice president of marketing for the IDDBA, who noted that all areas of the deli counter are seeing increases this year.

“As we all continue to battle inflation, people are going out to restaurants less in order to save money,” said Tony Dang, executive chef of Southern California grocer Gelson’s Markets. “Customers are looking for high-quality prepared meals to eat at home instead of going out. People are also preparing more meals from scratch at home, so deli-prepared vegetables or salads are popular items that help save time.”

Chris Mentzer, director of operations for Rastelli Market Fresh, with stores in Marlton and Deptford, N.J., shared that consumers are searching for quality and freshness over item and price. The search 

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for healthy choices continues, as consumers’ schedules become even more hectic.

“Seasonal salads using local farm fresh ingredients with the addition of proteins have become very popular, as they can be a complete meal instead of just a side,” he said. “The addition of plant-based deli products has sparked interest and will most likely see continued growth as new and diverse items are added to the category. 

“Our in-house roasted and smoked meats seem to lead our sales, over national brands, as fresh-roasted meats with no additives have broad appeal, especially for those looking for healthier options,” Mentzer added.

What’s working in deli

The deli department continues to evolve as preferences and tastes change.  

For instance, Gelson’s Tony Dang has seen greater interest this year in deli-prepared items from global cultures.  

“An increase in Japanese, Vietnamese, Thai, or Korean-inspired meals can be seen in grab-and-go cases,” he said. “Additionally, Gelson’s has utilized a Japanese Yakinuku sauce for grilled tri-tip skewers in our gourmet salad and grab-and-go cases.”

Gelson’s registered dietician, Jessica Siegel, continues to support the department with healthy salad recipes as well.

“Her new Spring Kale and Berry Salad is light and refreshing,” Dang said. “It has many fresh ingredients that support the heart and immune system, like almonds, strawberries, and blueberries. We consistently rotate Gelson’s classics with new recipes like our Savory Waldorf Kale as well. This helps keeps our gourmet case fresh with new options every month.”

Related:Deli-prepared foods were a driver in March

Deanna Depke, marketing manager for Volpi Foods, a St. Louis manufacturer of artisan cured meats sold at the deli, noted that there is a shift towards classic flavors in deli meats, with Genoa Salami, Pepperoni, and Prosciutto all selling strong.

“The classic charcuterie varietals are appealing to consumers’ everyday use of the products, and simple innovations like pepper-coated salami are proving to perform well,” she said. 

Mentzer believes fresh-roasted meats and homemade salads utilizing local fresh produce are what customers are looking for. 

“Customers are looking for variety, not just one major brand,” he said. “Many markets commit to just one major brand, where we are nimble and able to carry many brands and add new items daily as they become available. Our customer base likes to be challenged and we continue to source new and interesting products, so that we continually keep them engaged.”

Impact of COVID, inflation

Since Gelson’s has reopened its self-serve salad and hot bars, sales have not fully returned to pre-pandemic levels, Dang noted.

“We notice that customers are spending more carefully as inflation affects retail prices,” he said. “However, our grab-and-go items saw a significant increase in sales during the pandemic and continue to do well.”

At Rastelli Market Fresh, deli sales have increased since the COVID-19 pandemic, with Mentzer explaining that the fear of products being handled by staff during the pandemic slowed sales in the fresh sliced section, and the stores saw pre-cut and pre-packaged meat sales increase. 

“This area has maintained its momentum since guests who are time starved discovered the pre-cut section during COVID, and now find it to be a time-saving convenience,” he said. “The service deli is back to normal, as guests are now finding more consistency with their shopping habits.”

Savvy marketing ideas

One of the best ways to market deli items is to take advantage of cross-merchandising across departments in the store.  

For example, Gelson’s has strategically placed prepared chicken wings in the meat department, in addition to merchandised cheese plates with grab-and-go salads to further entice customers. 

“This has helped us drive sales throughout the store,” Dang said. 

Depke believes cross merchandising is paramount to a successful deli program, especially in 2023.

“Creating convenience adds value for shoppers and that value can drive up basket rings through incremental purchases,” she said. “For instance, placing Volpi sliced pepperoni next to pizza dough and shredded mozzarella is an easy, convenient meal solution that will yield increased revenue to the deli.”

Mentzer recommends sampling as the best way to market all deli items. 

“Tasting the product usually ends up in a purchase,” he said. “Hot specials on staples like American cheese, ham, and turkey are also a driver. These all lead into additional sales.”