BETWEEN THE BREAD 2004-11-22 (2)

Lynne Miller / SN Staff / Mina Williams / Jon Springer / Maryellen Lo Bosco / Bao Ong

When all the ingredients for an Italian sub are at your fingertips, adding a made-to-order sandwich program to your supermarket chain's deli might seem like a smart thing to do -- especially when your research and observations tell you shoppers are lining up and spending money, not at the other guy's supermarket two blocks down, but at the quick-service sandwich joint across the street.

What makes sandwiches so appealing? For starters, Italian subs and hoagies -- unlike burgers and fries -- look absolutely doable to supermarket retailers.

After all, they have the deli staff in place. They can buy all the sandwich components at reasonable cost. They have easy access to fresh produce, deli meats, cheeses, and a variety of breads and rolls baked fresh in the in-store bakeries.

"I'm certain the times they sell the most sandwiches are not the busiest times for [deli] labor," said Mark Roden, a former supermarket retailer who owns and operates more than 50 Subway restaurants in Arizona, and sits on Subway's National Advertising Board. "If I was still in the supermarket business, I'd look at it as a great opportunity."

The sandwich market is big. Consumers eat 45 billion sandwiches a year, but supermarkets get just a tiny share of the business -- restaurants capture the lion's share, according to research for the Madison, Wis.-based International Dairy-Deli-Bakery Association. Average gross margins on sandwiches add up to a meaty 54% for supermarket retailers, which is higher than the average gross margins for the department as a whole, according to IDDBA's research.

While pre-packaged sandwiches are nothing new, retailers recognize consumers prefer to have their subs made to order. Anyone who doubts that need only look at the phenomenal growth of the Subway sandwich restaurant chain. A couple of years ago, Subway made the food-service and supermarket industry sit up straighter when the company announced it had become the largest restaurant chain in the country, with more than 13,000 units, surpassing venerable McDonald's. A number of smaller, lesser-known quick-service and fast-casual restaurants specializing in sandwiches have sprung up, too. Even McDonald's, the top dog in the burger world, started testing deli sandwiches in a few North American stores this year.

Retailers have been taking notes on the Subway model. Some offer made-to-order sandwiches as an additional service, but only at certain stores and with little effort made to promote the service. Other retailers have made a major commitment to setting up sandwich stations that closely resemble a Subway, with menu boards, color brochures, custom order forms, meal deals, pre-sliced meats and cheeses, and frequency programs that reward return customers with free sandwiches.

In Phoenix-area supermarkets, Roden sees signs of commitment to sandwich programs. Retailers are installing promotional graphics in their stores and offering package deals on sandwiches, chips and beverages -- not unlike quick-service restaurant offers. Roden thinks more supermarkets will get in the business to keep up with the QSRs.

"They look at it as easy pickings," he said.

Nevertheless, supermarkets have a few things to learn about satisfying the sandwich crowd. Speed of service and convenience are part of the "meal deal," too, and, in those areas, supermarket delis have trouble competing with QSRs. Roden has timed the transaction at supermarket sandwich stations; by his watch, it takes about six to eight minutes to get a sandwich at a supermarket, vs. two-and-a-half minutes at a Subway.

The location of the deli is also critical, he said. Consumers are more inclined to stop at a deli sandwich counter when it's near the entrance.

"The supermarket is relatively slow," Roden said. "To get to the deli, you have to do some wandering."

For that reason alone, supermarkets should stay out of the made-to-order sandwich business altogether, said a veteran of the convenience store industry who has done consulting work for large supermarket chains.

"Supermarkets plain and simple are not convenient," said Ralph Sloan, senior partner at New York City-based Group Red, a retail design and merchandising consultancy that works with supermarket and c-store chains. "It's not their core competency."

Retailers could improve their operations by investing in technology. They could learn from convenience stores that have carved out a niche for themselves as successful sandwich providers. Many of those stores rely on electronic ordering kiosks, he said.

"Some supermarkets have kiosks where people at the beginning of the shopping trip can do the ordering for the full-service deli and later pick up the meats and cheeses," he said. "Integrating that technology into the sandwich programs would improve their speed, accuracy and enhance the programs that are there."

Many supermarkets already have good sandwiches and friendly, competent servers working in their delis. What they lack simply is good marketing. That was Rosita Thomas' conclusion, based on research she did for the IDDBA last year. Thomas, president of Thomas Opinion Research, Manassas, Va., formed her opinions after conducting interviews with more than 1,000 consumers and several retailers.

"Supermarkets need to reach out to consumers to get deli sandwiches on their radar," she said.

In fact, nearly two-thirds of surveyed retailers with sandwich programs have no formal marketing plans for their sandwich programs, IDDBA's "What's In Store 2004" report noted.

For this special report, SN dispatched an associate editor on staff and three correspondents to sample the subs and heros at supermarkets around the country. SN visited a Wegmans Food Markets store in Wilkes Barre, Pa.; a Publix Super Markets store in Lakeland, Fla.; a Safeway in suburban Seattle; and Kowalski's Market in Woodbury, Minn., to see how the stores' sandwiches stack up against Subway. SN's team evaluated their sandwiches and other department features on a scale of 1 to 10, with 10 being the highest possible score, and 1 the lowest. The reviews follow.

Safeway Sandwiches To Go

At a suburban Safeway in Seattle, sandwiches play a key role in the newly redesigned deli.

Immediately to the left of the entrance, in line with the service deli, is a deli sandwich counter to rival most sandwich restaurant chains. There's also a case full of panini sandwiches ready for the grill.

Attractive signs on a board above the case list the menu items. Additionally, sandwich selections are listed on an order form available at the counter and within a "bucket" attached to roped stations used to keep lines orderly. Earth tones and soft lighting give the department a homey atmosphere. For appearance and appeal, SN rated the department a 10.

As with the local sandwich shops, Safeway presents the sandwich fillings using a refrigerated sandwich case in full view of customers, with a sneeze guard that ends at eye level. The panini are merchandised within a refrigerated service case in line with the deli sandwich case. When a customer makes a selection, the sandwich is removed from the case, and placed on the grill designed to create the gooey and crispy Italian-style sandwich. Eight varieties of panini, including two breakfast sandwiches, are available. Overall, the deli sandwich and panini presentation is top drawer, earning a 10-point rating.

The three associates at the counter were well versed on the signature sandwich program, what breads were available, and even suggested condiment combinations. They all were quite attentive to customers. Again, SN rated the department a 10 for service.

Available in 14 varieties, the deli sandwiches are made using Safeway's private-label Primo Taglio meats and cheeses, and artisan breads that are baked in-store. SN ordered the Chicago South Sider, a roast beef concoction featuring green leaf lettuce and tomatoes, horseradish dressing and tangy horseradish cheddar cheese on rustic Italian bread. Within minutes, the associate built SN's sandwich to order, with no onions as requested. The crispy crust and chewy interior of the bread perfectly complemented the thickly sliced beef and cheese, while the crispy lettuce and thickly sliced tomatoes gave the sandwich a fresh note. The horseradish dressing added zing to the generously proportioned sandwich.

At this store, shoppers pick up sandwiches to take home. There's no in-store dining. Prices here are higher than at local Subway stores. The signature deli sandwiches, offered on one of six styles of bread ranging from rustic Italian to multigrain, are $4.99 for a six-inch to $8.99 for a 12-inch. Comparable roast beef sandwiches at Subway run $3.89 for a six-inch and $5.75 for a 12-inch sandwich. Sandwiches from the panini case are priced at $4.99, with a focaccia offering priced at $4.99 for a half sandwich and $8.99 for a full sandwich.

Associates here attempt to upsell shoppers, asking them if they would like the meal deal. For $1 more, customers can select from a 1.5-ounce bag of chips and a medium fountain drink, or a piece of fresh fruit and a bottle of water. Another offer includes half of a six-inch signature sandwich combined with a five-ounce garden salad for $4.99. Safeway also offers frequent buyers a buy-seven, get-one free option. SN rated Safeway an 8 on price.

In marketing the program, Safeway seems to have covered all the bases, using a combination of signs, order sheets, meal deals, an outside sandwich board and frequent buyer program. For promotion, SN gave Safeway another 10 points.

MINA WILLIAMS

PUBLIX STRONG ON SERVICE

The sandwich program at Publix Super Markets in Lakeland, Fla., closely mirrors the Subway restaurant model, ensuring customers get a convenient, predictable and affordable meal every time they frequent the sandwich station.

Around 2 p.m. on a weekday, SN visited a large, clean and modern full-service supermarket with the deli department tucked away in the rear. It's not the most convenient location for shoppers interested only in ordering a sandwich, though it would not be a problem for those buying sandwiches as part of a larger shopping trip. There's no in-store dining at this store.

The sandwiches were made alongside the service deli counter, in between the cold-cuts area and a case for hot prepared foods. SN was a little confused at first as to whether to order the sandwich from the clerk behind the cold cuts, or go straight to the sandwich area and wait for the clerk who was there. There were customers waiting for cold cuts who took numbers, but the deli associates weren't calling numbers anyway. When the associate at the sandwich area was free, SN asked her if she could make a sandwich.

Menu choices, posted on a board above the counter, indicated there were about six different sandwiches in either "whole" or "half" size. Sub rolls were displayed prominently behind the glass counter. SN asked the associate which breads were available, and she said white, wheat or sunflower. SN chose sunflower, which was confusing because the bread appeared to be behind a part of the counter that indicated Italian. SN rated the overall department appearance and the merchandise presentation a 7, noting it was clean and the food looked appetizing, but it was not clear at first where to go or who to speak to in order to get a sandwich. For promoting the sandwiches, SN rated Publix a 6.

SN placed an order for a whole "Ultimate" sub: turkey, roast beef, ham and cheese on sunflower bread. SN was disappointed to see the meat for the sub was presliced and stored between sheets of wax paper, a la Subway. Coming from "the Deli belt" in the Northeast, SN expects a good hero to start with meat that's cut and piled high when the order is placed. Using precut deli meats enables restaurants to make virtually identical sandwiches all the time. It no doubt speeds up the sandwich-making operation and manages cost. However, it also appears less "fresh" than meats sliced from a cold roll, or carved from a hot roast.

As at Subway, the Publix deli assembles the sandwich behind the glass in view of the customer, picking from bins of precut lettuce, pickles, onions, olives, peppers and other toppings. Publix had most of what's offered at Subway, but no cucumbers; instead, there were two different kinds of pickles available. The associate asked SN if he'd like mustard and mayonnaise, oil and vinegar, and salt and pepper in essentially the same order as followed by Subway associates. One difference: Publix cuts its sub in half and wraps the halves separately, making it easier to eat or save some for later. Service was friendly both at the deli and cashier. It also took well under five minutes for SN's order to be filled. SN rated Publix an 8 for service.

The bill for the sandwich alone was $5.59. SN did not observe any meal deals at this store. The only special SN noticed were prepackaged turkey and swiss sandwiches for $3.79. SN picked up a cold soda near the front register for $1.09. The total tab for lunch/leftovers was $7.12. A nearby Subway store in Lakeland sold a 12-inch Subway Club -- its equivalent to Publix's Ultimate -- for $5.74, just sightly higher. For price, SN rated Publix a 7.

The sandwich was good, but not great. SN liked the sunflower bread, although the half SN saved for later became somewhat soggy. SN observed ordering a sandwich at Publix was not unlike a trip to a typical Subway. That is to say, it was a perfectly fine sandwich and a perfectly fine experience, but not particularly special.

JON SPRINGER

WEGMANS SCORES ON TASTE

Wegmans may not be the first place that comes to mind when a craving for a tasty sub hits, but the supermarket in Wilkes-Barre, Pa., can hold its own with big sandwich chains when it comes to taste and ambience.

Late one afternoon, SN visited Wegmans' submarine shop and found the tuna fish sandwich tasted better than a comparable one at a Subway eatery.

Wegmans Old-Fashioned Submarines is housed in the Market Cafe, close to the pizza counter and salad bar in one corner of the store. The food stations have a dedicated cashier. Nearby, there is a self-serve soda fountain for the sub shop, as well as refrigerated beverage cases.

There's a menu behind the servers and additional signs out front, including one that points out that Wegmans' subs are good for NFL tailgating parties. The story of how Wegmans partnered with a venerable sub shop operator near its headquarters to bring customers the "old-fashioned goodness" of a sandwich "made just for you" is relayed on the sandwich bags. For promotions, SN rated Wegmans a 7.

The breads include three French bread options: seedless, sesame seed and whole wheat. There are 15 choices of hot and cold sandwiches, including Danny's Favorite (Genoa salami, capicola and spicy ham), Joey's Old-Fashioned Assorted (turkey, ham and Genoa salami), Wegmans Assorted (roast beef, turkey and ham), Meatball with Mozzarella, Hot Chicken Finger Sub, and several other deli meat and cheese combinations.

It took less than five minutes to get served here during SN's late afternoon visit. SN ordered the tuna combo on sesame bread, and found the tuna relatively dry and not mushy. The deli associate offered to put additional mayonnaise on the sandwich. The sandwich was generous, probably filled with at least eight ounces of tuna. The bread was fresh and tasty, neither too hard nor too soggy, though not exactly crisp, which would have been ideal. SN ordered only shredded lettuce as a topping; it blended in well with the tuna.

The $5.99 combo meal includes a seven-inch sub, choice of cookie or bag of chips, and a medium-sized fountain beverage. Family meal deals are also available. SN's combo meal was about $1.50 more than Subway's meal ($4.49), although Subway's six-inch sandwich was one inch smaller than Wegmans and contained less tuna. Subway offers more sandwich choices, toppings and dressings than Wegmans. A seven-inch Wegmans sub by itself costs $4.49, while a 14-inch sub costs $6.79. Yet considering the generous size of the sandwich at Wegmans, SN believes the combo is a good value. For price, Wegmans got an 8.

The food at the counter looks fresh, clean and appetizing. The area is brightly lit. For merchandise presentation, SN gave Wegmans a 7. Associates use plastic gloves to handle the food, and they wear neat, clean uniforms. For overall appearance and appeal, this shop rated an 8.

Two teenagers working at the counter were polite and efficient, though not overly concerned with good service. For example, the server did not offer SN a choice of breads. SN had to ask her what the choices were because she automatically grabbed the plain bread. She also did not mention the choice of toppings or dressings, and she left it to SN to figure out the menu. She did, however, offer to put the extra mayonnaise on the bread. Another associate about 10 years older than the teenagers politely and patiently answered questions later during SN's visit. SN rated service a 7.

Ambience is excellent compared to the typical quick-service restaurant. The large, clean and well-lit dining area includes comfortable booths across an entire windowed wall and additional seating. One corner earmarked for children includes toys, small chairs and a television tuned to a kids' program.

While Wegmans offers a good dining experience, the supermarket has plenty of competition from quick-service restaurants and delis. It's probably not a destination for someone looking for a sandwich only. However, for a shopper at Wegmans, especially when the supermarket is her last stop, the sub shop is probably an excellent meal choice.

MARYELLEN LO BOSCO

KOWALSKI'S SECRET IS OUT

Kowalski's Markets' best-kept secret may be its great deal on made-to-order sandwiches.

SN visited Kowalski's in Woodbury, Minn., at noon on a Sunday. Upon entering the store, shoppers veer left to reach the deli next to the aisles of baby food, pet food and soaps. The well-designed department is reminiscent of a European gourmet deli, with hardwood floors, high ceilings, green street lamps and even a running water fountain.

Surrounded by deli food and artisan bread-lined walls, the sandwich station is next to the sushi bar in front of the deli section. The associates were dressed neatly in black-and-white uniforms with berets, but it was confusing to know who to order a sandwich from. The sandwiches are not promoted well in the department or anywhere else in the store. When SN asked for help, however, an associate was attentive and more than accommodating.

A chalkboard above the sandwich station, which was difficult to read because some letters were faded, serves as the menu and lists the options. For bread, there's a choice of sourdough, multigrain, pumpernickel, ciabatta or a croissant. The cheese choices include American, Swiss, provolone and hot pepper jack. Toppings include lettuce, red onions, tomatoes, green peppers and sprouts, with the usual assortment of spreads like mayo, Miracle Whip and mustard. The fillings for the sandwich include smoked turkey, turkey, roast beef and Boar's Head ham. There's also tuna, chicken and egg salad sandwiches. The array of choices looked appealing. For merchandise presentation, Kowalski's earned a rating of 8.

SN ordered a roast beef sandwich on multigrain bread with provolone and all the fixings. Though there was not a line of customers, it still took five minutes for SN to receive and pay for the order. An associate told SN the lunchtime crowd during the week is heavier, leading SN to conclude it would take even longer than five minutes to get a sandwich on a weekday. The countertops appeared clean, and the server used gloves while preparing SN's sandwich. The service was friendly, and the sandwich was prepared exactly as requested. SN rated the service an 8.

For $5.99, SN got a whole sandwich that included potato chips and two pickles. A half sandwich with soup, located at the salad bar nearby, is also available for the same price. A half sandwich alone costs $3.99. Compared to a sub sandwich at Subway -- a six-inch roast beef sub with chips costs about $4.58 -- the price was good considering the superior quality and generous size. SN did not object to paying a little more since he felt the superior quality of the sandwich was worth the extra money. For price, SN rated the program a 9.

The sandwich was more than enough for one person. The lettuce, tomatoes and onions were fresh and crisp. The roast beef was flavorful and slightly moist -- all the meats are presliced, but come fresh from the deli. The only criticism was that the bread didn't taste especially fresh.

After paying at the front cash registers, customers can have a seat at a dining area in front of the store by the deli and a Starbucks. The wood tables are clean, and seating is comfortable. Water, napkins and utensils are readily available. For the department's appearance and appeal, SN rated it a 9.

SN gave Kowalski's a 5 for promotions. With more variety in choices for sandwiches and a better promotions program, Kowalski's ratings would have been higher. Nevertheless, SN would come back for lunch at Kowalski's based on the store's appearance and appeal, price and superior quality.

BAO ONG

Sandwich Scorecard

How the stores were rated. Each made-to-order program was rated using a 10-point score for each evaluation element: department appearance and appeal, presentation, service, price and promotions. These five scores were added up to arrive at a letter grade: 41 to 50 points = A, 29 to 40 points = B, 16 to 28 points = C; any score below 15 = F.

Store: Grade; Score

Safeway: A; (48)

Kowalski's: B; (39)

Wegmans: B; (37)

Publix: B; (35)

Rating the Sandwiches

Safeway: Score

Department Appearance and Appeal: 10

Merchandise Presentation: 10

Service: 10

Price: 8

Promotions: 10

Publix: Score

Department Appearance and Appeal: 7

Merchandise Presentation: 7

Service: 8

Price: 7

Promotions: 6

Wegmans: Score

Department Appearance and Appeal: 8

Merchandise Presentation: 7

Service: 7

Price: 8

Promotions: 7

Kowalski's: Score

Department Appearance and Appeal: 9

Merchandise Presentation: 8

Service: 8

Price: 9

Promotions: 5