RETAILERS SHOULD EXPAND DELIS: EXPERTS

Bobbie Katz

LAS VEGAS -- Consumers increasingly turn to supermarket delis for convenient meals. Retailers can capitalize on this trend by expanding their operations, a trio of deli experts said.

Mike Miller, director of food service for Clemens Family Markets, Kulpsville, Pa.; David Dohmann, vice president of deli business for Jennie-O Turkey Store, Willmar, Minn.; and Doug Sumpter, president of DPS Inc., Boise, Idaho, recently discussed the growth in deli department sales and offered tips on establishing a food-service business from the deli.

According to Dohmann, when retailers look at deli, they only see the sliced meat case, which accounts for a 30% of deli sales.

"What we need to look at is the peripheral sales, the other areas around the deli that present great opportunities for getting into the food-service business and addressing the areas of today's consumer demands for healthy and convenient meals," Dohmann said.

In his remarks, Sumpter added that the food-service piece of the retailer's business, from the management standpoint, should be handled separately. He warned that profitability in this area is difficult to achieve. In addition, the way that profitability is measured is very important, he said. As to why retailers should expand their deli operations, Sumpter emphasized that customer convenience is definitely No. 1.

"Today's consumers demand greater deli selection," Sumpter said. "Precooked meats -- whether they be roast, meat loaf, pork chops, sirloins, beef tips, or ham -- offer a broad selection. You also have to provide accompanying side dishes: salad, potatoes, rice dishes ... the list goes on and on."

Sumpter advised retailers to closely monitor their operations. They need to come up with a product mix that works, and change the assortment on a seasonal basis. The prepared-foods department should offer a wide variety of homemade dishes, using only high-quality ingredients, clean, fresh produce and whole grains, Sumpter said. He noted it is important to have a tight grip on portion control, or you'll never have a handle on your margin or a consistent experience for consumers.

"Whether you brand your food-service department or not, you have to have discipline and be right demographically," he said. "You have to test what you're doing and stay involved. Document your standards. Forecasting and scheduling are critical for a successful program. Since you have no history in this area and you're making a long-term commitment in terms of personnel, equipment and space within your store, step up, pile it up, and see how much you can sell. This department should be fun and light-hearted. Whatever equipment you use, be consistent in all of your stores."

Miller suggested retailers turn to their vendors for contest promotions and, more importantly, help with new initiatives.

"You have to provide quality, product consistency and competitive pricing," Miller stated. "Know what's selling and what's not, and adapt. Have a variety in your selection. Customers expect to see something new. Have different lunch and dinner solutions your customers can choose from. Party trays are crucial. You need to know what things sell and to put out the right trays at the right time."

"No. 1 on the list where portion control and food preparation is concerned is to take the difficulties out of the hands of your employees and make things as easy as possible," he continued. "Work with your vendor partners in building a quality food-service department. You have to have a goal for your food-service department, or you'll wander aimlessly from a profitability perspective."

Since there is already a core group of customers that frequent a store at lunchtime, dinner and even breakfast are potential growth opportunities, he said.

"Everyone's time-starved," Miller said. "We race around, which doesn't leave time for the most important aspect, planning. As retailers, we can assist our customers by making it easier for them; therefore, planning for them. You have to try adding selections, and you have to be bold when trying new things. Don't do it in a half-hearted way."