Reinventing the Deli to Recoup Lost Sales Amid Retail Foodservice Closures

Supermarkets have seen unprecedented increases in sales since the onset of the COVID-19 pandemic. All categories have seen double-digit gains with the exception of deli and bakery departments, which have shown consecutive double-digit reductions in sales every week as many stores limited or closed self-service bars and service case operations. Retailers had to scramble to find creative ways to merchandise packaged prepared foods, salads, bakery and service products in existing refrigerated fixtures that were designed for open self-service and service products.

Only select deli products have seen gains within the recent months. According to data from IRI, random-weight deli cheese and meat saw double-digit increases the week of April 26 versus the comparable week in 2019. Most other products in the deli, including prepared foods, self-serve bars and full-service areas have seen a sharp decrease since the onset of COVID-19. 

Although there are currently no documented cases of COVID-19 contracted from food, customer perceptions and concerns about contamination from common touch points like tongs and containers are likely to be around for the foreseeable future. In other words, a lack of demand for prepared deli products is not the issue; rather, safer, more efficient systems to display and serve prepared deli products are needed.

As customer preferences continue to evolve due to the impact of COVID-19, flexibility is key to gaining back lost sales. Masks will be a constant reminder of the risks involved in public places, and customers may continue to want to get in and out of retail establishments quickly. Grab-and-go product options should continue to remain popular.

A growing potential for prepared deli sales

Although the move to packaged products offers customers the convenience of prepared salads, soups, sides and meal solutions, current department designs are not set up to merchandise these products for optimal sales.  Temporary solutions such as placing packaged product in existing service cases, salad and food bars work for the short term. Since salad and food bars are designed for single-deck merchandising and service cases are designed for service from deli personnel, these are not long-term solutions to promote packaged product from a merchandising perspective (in terms of meeting priorities such as product accessibility, pack out, visibility and product temperature). Adding grab-and-go mobile refrigerated merchandisers with products offered in a variety of sizes and weights provides a viable option to add more capacity and increase impulse purchases.

Now that the economy is reopening, people heading back to work have less time and energy to prepare meals at home. This, combined with the unfortunate closures of restaurants and the subsequent limitations on seating capacity even after re-openings present an opportunity for supermarkets to promote prepared meals and sides. Some retailers have partnered with local restaurants to sell meals in store. Meal kits and prepared sides are gaining momentum and are an opportunity to offer convenience to shoppers.

Innovation opens up opportunities

Since the onset of the pandemic, Hussmann specialists have sought creative ways to modify existing refrigerated cases and recommend alternatives to help retailers adapt and regain lost sales due to the change in consumer preference from open to packaged product. Modifying salad and food bars by raising the back of the wells to allow for a tiered display for better pack out and product visibility is an option. Hussmann is also developing retrofit sliding front doors for service deli cases so they can be used for both for service and self-service. This solution could be applied to any department with service cases including meat, seafood and bakery. Hussmann also recommends self-contained mobile cases as an option for pre-sliced packaged meat and prepared foods items as well as meal kits. Since fresh meat is the entree in many meal kits, it is imperative that cases offer adjustable temperature settings suitable for fresh meat.

Hussmann has developed many options to give retailers the flexibility to promote packaged products while maintaining optimal temperatures of anything from produce to fresh meat. Cases like the DOE compliant Q Series grab-and-go cases and microSC self-contained line with environmentally refrigerant, R-290, provide multiple solutions to regain lost sales. These multi-use cases can be placed in virtually any perimeter department and can be moved and repurposed as promo cases if salad and food bars reopen.

Future store designs are being reimagined at the Hussmann specialty plant in Chino, California, to include service lineups to replace salad and food bars. For example, service salad bars could mimic service lineups such as one you might find at a fast-casual restaurant with modifications for make-your-own-salad options. This could be done in a perimeter service case lineup or in a kiosk that would include salads, prepared foods, cheeses and made-to-order sandwiches. Options like convertible sneeze guards, which allow the case to change from full-service to self-service, provide flexibility if and when it is deemed safe to move back to self-service.

Grocery is an essential industry that has and will continue to feed the nation during this challenging time in our history. With Hussmann, retailers are equipped to brave this ever-changing landscape and provide excellent service for their customers. Check out how Hussmann can help you with the Changing Dynamics happening in food retail.