A TV FAVORITE RETURNS

BOB BAUER

It looks like the good old days of TV dinners are making a comeback in some frozen food departments. In interviews with SN, a number of retail buyers from different markets said their customers are going after the inexpensive, basic full meals that made frozen TV dinners an enduring image of American culture.

It is one of the recent noteworthy wrinkles in a big category that continues to be propelled by price promotions. Frozen dinners nationally keep growing slightly in unit sales, and declining in dollars, according to scanning data.

Other trends noted by industry sources include brisk volume movement of health-oriented meals, and a strong record for sales of Italian items.

Most, though not all, retailers interviewed said the high end of their assortments is moving more slowly. Michael Schnapp, frozen food buyer for Seaway Food Town, Maumee, Ohio, is one grocer who has seen sales gravitate toward traditional lower-priced items.

"There's been a shift, with the demise of the high-end products," he said. "People are going back to basics. They've gone away from Banquet's high-priced items, for example, and back to the cheaper, original Banquet dinners."

"I see a move back to basics in dinners, and I like it," said a North Carolina retailer who asked not to be identified. "We're selling a lot of the $1.50 dinners.

"We can still run Banquet at 99 cents and get good numbers. Healthy Choice and the Swanson four-compartment trays are doing very well," he added. "Regular cheap dinners are steady. Swanson is keeping their prices low enough so you can run them at three for $5."

The retailer also said Food Lion, a direct competitor, has been doing three-for-$5 promotions regularly, and apparently getting results. "We have them at $1.59,

but I'm looking to put them at three for $5 again myself," he said.

Jay Madden, supervisor and buyer of frozen foods for Carl's Grocery, Mission, Texas, said he's encouraged by recent efforts by manufacturers to create more sales on dinners and entrees, items he said bring him good margins. "A lot of manufacturers have had some strong promotions trying to spur some sales."

A major New Jersey retailer said it's those promotions that drive sales.

"When the manufacturers run their rebate deals or the stuff is 40% or 50% off, the dinners and entrees fly out of here. At other times, some products don't move too well. It seems there has to be some sort of hoopla in order to get people's attention. The good thing is there's almost always at least one manufacturer doing something."

The North Carolina buyer said the promotion fever probably stems from the department's overgrown assortments.

"We have more stockkeeping units of dinners now than a couple of years ago. We used to have a lot less; you would have fewer items and sell a lot more of those. Now we've traded up on SKUs, but we're not selling more in total than we used to. I'd rather sell 100 cases of five SKUs than sell the same number of cases with a lot more SKUs."

On the other hand, he conceded the current climate seems to demand that chains continue to carry wide assortments. "But we try to avoid duplicates. There's no reason to carry everybody's chicken dinner if they're all the same."

Another Southern competitor, J. Thomas Outlaw Jr., director of frozen food for Ingles Markets in Black Mountain, N.C., said he has had success not only with cheaper dinners and entrees, but expensive ones as well.

"We're doing a good job on different ends of the scale," he said. "We brought in Marie Callender a couple of months ago. That's a high-quality, high-priced item and it's been going great. We also do well with 99-cent entrees like Budget Gourmet.

"Lean Cuisine and Stouffer's have done well since they've gone to multiple pricing," he added. "Healthy Choice is doing better than it was a year ago. The whole category has picked up over the last few years."

Outlaw's current SKU count is higher than he has carried in the past, but he isn't looking to boost it any further, he said. "It's getting to the point where when one comes in, one goes out. We made an exception when we took on Marie Callender as an extra item," Oultaw said.

Other retailers, such as Madden of Carl's Grocery, said sales of high-end products are faltering.

"Inexpensive dinners are doing well, but not the more expensive ones," he said. "The economy is not great here." Madden said even the health-oriented products are somewhat flat. "People have gone back to fresh products when they want a better dinner. They're not buying as many frozen dinners as before."

A retailer from New Jersey who asked not be named said the low-priced, complete dinners are indeed making a comeback, despite spikes of competition from other featured lines.

"If there's nothing in the dinner or entree area on sale, then the low-end items sell at a better clip than normal," he explained. "Even without that, the low-priced, complete dinners are picking up. We seem to be moving more of them lately.

"We've gotten some great results when we've put them on sale, too," he added. "A frozen dinner is definitely not enough to make a meal for me. But if they're 99 cents each or $1.50, you can have two, or even three, and pay almost nothing for your meal. The lower-priced dinners are great for when parents want to do up something real quickly for their kids."

Industry numbers compiled for the year ended Sept. 11 by Nielsen Marketing Research, Northbrook, Ill., show how price is influencing frozen dinner and entree sales.

The scanning data tracker found that although frozen dinner sales were up 2.2% in unit volume in that time period, they were down 1.2% in dollar volume.

Banquet dinners, with an average price of $1.25, were second only to Swanson in dollar sales, but first in unit volume share with 26.9%, more than 5 percentage points ahead of Swanson. The Nielsen research also illustrates another trend. Sales of Italian entrees, diet Italian items in particular, are soaring. Sales were up 14.3% in unit volume and 10.1% in dollar volume -- another indication of the importance of price, since most of the items are simple pasta dishes with an inexpensive price point. Three of the top five Italian items in both dollar and unit volume were low-fat products (from Lean Cuisine, Weight Watchers and Healthy Choice).

The New Jersey retailer theorized that the Italian items are selling well because there are so many to choose from. "That's the most popular area in terms of number of SKUs," he said. "It's probably because they're the easiest to produce.

"Look around at restaurants in your area," he added. "You can usually find a few Italian restaurants in every area, and there's always a decent number of people in there. The dinner manufacturers have capitalized on the popularity of diet food and Italian food, and meshed them together."

Diet items overall are currently riding out their biggest promotion period of the year, with some manufacturers winding up three-month programs coinciding with New Year's resolution time.

Weight Watchers, Lean Cuisine and Healthy Choice were mentioned by retailers as being the most active promoters. Retailers are expecting another big push shortly, as pre-beach promotions begin.

Ray Mar, a buyer for Jumbo Markets, Sacramento, Calif., saw the anticipated rise in sales of diet products hit immediately. "Diet products have been doing well," he said. "A lot more people have jumped into the diet-healthy market. If you look at the diet plans like Jenny Craig and Weight Watchers, you'll see January is the time they push hardest to get new members. They're trying to entice the same people we're trying to get in our stores."

Like TV dinners, healthier eating habits may become another part of American culture, said some retailers who are not surprised to see the low-fat and low-calorie products moving.

"Premium, health-conscious dinners are doing well. I guess it sort of combines people's fondness of TV dinners with their wish to eat healthy," said a buyer from a Southern chain. "I'm not talking about diet dinners per se, where people look just at calories." She said her customers are looking for fewer calories and good taste.

"There's a trend toward Budget Gourmet Lite and Healthy Choice and products like that," she added. "Things are very spread out. It's not just Weight Watchers and Lean Cuisine now."

She thinks diet dinners will continue to eat up an increasing percentage of sales. "As long as they keep the taste and quality, they'll do well. But you never know. It changes constantly."

Gerald Mashburn, general manager and buyer for Piggly Wiggly Stores in Calhoun, Ga., said sales of diet products from all departments are increasing.

"They're really coming on. In one of our stores we're creating a whole section for diet foods from all departments. All the diet items will go there. We've seen a big increase and think it will continue." Mashburn said the diet items will also still be available in their regular places, such as the frozen food aisle.

Some retailers, however, were not as confident that "healthy" frozen meals are here to stay.

"I don't think we're seeing quite the results we used to," said Seaway's Schnapp. "We're seeing so many diet and healthy foods these days, I think the thrill is gone. Those who are really into healthy foods are going to buy fresh.