SURVEY FINDS SALES UP, SKUS DROP IN FROZENS

BOB BAUER

ORLANDO, Fla. -- Category management levels could be on the rise in the country's frozen food departments.

According to research conducted by A.C. Nielsen, Northbrook, Ill., dollar sales of frozen food were up 3.5% for the 52 weeks ended June 11. In that time frame, however, the number of items carried in frozen food departments dropped slightly.

Steve Warshaw, vice president at Nielsen, said the decreases were measured by segment, so an exact percentage of the decline across the entire frozen food category was not calculated. Warshaw presented his company's findings during the National Frozen Food Convention here.

When asked after the presentation if those numbers show the results of an increase in category management in frozens, he replied, "It's very possible. One of the things [retailers] could be doing is clearing out the dead wood. So that's very possible."

The item trimming is widespread. Warshaw said only three segments within frozens showed increases in item counts: novelties had 5% more items on the shelves; desserts, fruits and toppings had 2.5% more items, and breakfast foods posted a marginal gain.

"Most categories had fewer items, down as low as 6.5% for unprepared meat, poultry and seafood," he said.

The meat category also represents another low point of sorts for frozen food in supermarkets. Scanning data evaluation shows about 25% of the business for that segment is now moving through warehouse clubs, compared with only 15% of all frozen food sales combined moving through the

club channel, Warshaw said.

The latest scanning data analysis also shows evidence of a direct relationship between sales growth in frozens and promotion, and that retailers are exploiting that relationship more often than before with support from suppliers.

"What we're seeing generally is a more aggressive posture being taken by the retailers and by manufacturers in the form of coupons. In virtually every situation, the sales that were revolving around some sort of promotion activity grew at a faster rate than sales did in general."

Pizza -- which along with snacks and hors d'oeuvres make up the largest growth area in frozens -- is a prime example of the effect of promotions on sales, Warshaw said. Trade support for pizza was up 13% and coupon purchasing was up 21% for the year. He said 22% of all purchases in the pizza category are made with some sort of trade support.

The juices and drinks segment was the only one that showed dips in both trade support and couponing. Juices and drinks also showed a decline in total sales.

About 15% of all frozen food purchases are made with some sort of trade support. However, Warshaw said that still puts frozens a little further back on the trade support pipeline than some of the other major departments and categories Nielsen tracks.

Couponing is also lower in the frozen food category, with total sales being purchased with a coupon ranging typically under 10%.