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Supermarket delis are finding that freshly made sandwiches and heros are more popular than ever. Even quick-service restaurant chains are busy introducing their own versions.But make no mistake -- this is retail territory."We appreciate the emphasis on deli sandwiches from the fast-food restaurants, because it also highlights us," John Highbaugh, director of food services at Minyard Food Stores, Coppell,

Coeli Carr

July 16, 2001

7 Min Read
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COELI CARR

Supermarket delis are finding that freshly made sandwiches and heros are more popular than ever. Even quick-service restaurant chains are busy introducing their own versions.

But make no mistake -- this is retail territory.

"We appreciate the emphasis on deli sandwiches from the fast-food restaurants, because it also highlights us," John Highbaugh, director of food services at Minyard Food Stores, Coppell, Texas, told SN. "Consumers start looking for that product, and we can provide it for them, too."

In its 20-sandwich menu, Minyard's top three items are ham and cheese, turkey and cheese, and roast beef and cheese. Other popular entries include an all-American sub, turkey club, pastrami, tuna salad, chicken salad, egg salad and a variety of Po' Boys. Minyard's also sells overwrapped sandwiches.

At Mill Valley, Calif.-based Mollie Stone's Markets, a seven-store chain in the San Francisco area, co-owner David Bennett has found that "some kind of turkey" comprises his three, overall best-selling sandwiches. Turkey roasted on the premises daily is the top choice, followed by brand-name roasted turkey and smoked turkey from an outside vendor. Peppered turkey and pastrami turkey, which is made with pastrami spices, round out the top five turkey favorites. Bennett cites consumers' concerns about health for the overriding popularity of these selections, though the stores provide a full range of other choices, including freshly baked ham and prime rib.

Against this backdrop, certain segments of food service are looking to expand their own menus, particularly QSRs. Several chains are testing fresh sandwiches on their burger- and fry-laden menus in hopes of capturing additional sales.

In one case, Arby's, a division of the Triarc Restaurant Group, Fort Lauderdale, Fla., has just come out with its Market Fresh line of sandwiches, an event deemed important enough to warrant the company's first national ad campaign in 15 years.

In another case, Schlotzsky's Deli, Austin, Texas, asks consumers to "kick it up a notch" and buy its turkey and bacon club on a jalapeno cheese bun sandwich; and Panera Bread Co., Richmond Heights, Mo., has become a thriving bakery-cafe business by concentrating on sandwiches.

"Quality supermarket operations that offer fresh sandwiches made to go -- we're looking for a piece of that business, no doubt about it," said Mike Welch, Arby's senior vice president of operations, who noted that the company's research revealed their Market Fresh sandwich line was a product its customers were impressed with and "would never have expected to buy in a fast-food restaurant."

Arby's launched the new line -- roast beef and swiss; roast ham and swiss; roast turkey and swiss; and roast chicken Caesar -- because research also revealed the typical Arby's patron to be older, with more discriminatory taste buds and a desire for more visually exciting and flavorful food, Welch said.

After Arby's initial testing in 1,000 stores and a national launch in 3,200 stores in the United States, sales of Market Fresh sandwiches were in excess of 10% of total sales in both instances, Welch stated.

"Consumers are looking for higher-quality fast food they can get every day, and these sandwiches represent that," he said. Welch noted that Arby's is already testing extensions to the line -- additional sandwich varieties and four different kinds of salads.

But fast-food establishments are only beginning to penetrate a market that supermarkets have cultivated for years.

"Deli sandwiches have always been a staple and a focus at Minyard," Highbaugh said. "Sales have always been steady; we could always count on it." But Highbaugh isn't averse to making a good thing better.

"Right now, we're re-energizing our program," he continued, referring to the chainwide Minyard sandwich program instruction manual he's produced, which is also being translated into Spanish. "There are no new recipes, but there's new marketing. Lunch packs -- a sandwich, chips and a Coke for a set price; new in-store signage; and a way to address consistency, quality and portion control. We're all looking for new marketing ideas."

After Minyard completes the training process with its staff -- a process consistent with "taking a good program and providing more structure" -- the chain will step up advertising to "improve customer awareness of sandwiches in the deli and add new fuel to rejuvenate the category."

Although Highbaugh emphasizes that deli sandwiches never went out of style, he believes that the new fast-food-, pizza- and hamburger-eating generation -- not brought up on a sandwich regime -- is ripe for something new. It might be a traditional sandwich, but it's being marketed in a new way.

All meat and poultry sandwiches are a set price, and customers get a custom-made sandwich on either rye, a kaiser roll, a croissant or a hoagie, all of which are made in the bakery. Packaged whole wheat or white bread is also available. Customers can choose cheese from the prescribed varieties and, said Highbaugh, the deli staff will also "run it through the garden" with lettuce and tomato slices, and a final smear of either butter or mayo. Patrons wanting a more premium product line of meat or cheese pay a surcharge.

Highbaugh is reluctant to further toy with a proven formula.

"There's a lot to be said for bigger, better and faster," he said. "But the traditional program will always be your foundation." he said. "We're staying traditional because, if you're offering too much, you're not offering anything."

Since its beginnings 15 years ago, Mollie Stone's has had a "very consistent deli program." The chain has an employee-training program to effect co-owner Bennett's goal to make the best sandwich possible and keep product consistency chainwide.

"We stop at nothing to ensure quality," he said.

Customers order off a menu, choosing their bread -- some of which is baked in-store or brought in through the chain's bakery commissaries -- along with the filling, cheese and condiments. Because of regional preferences, the most popular sandwich bread and roll is sourdough. Most of the sandwiches run between $4.50 and $5.

"You have to have the right price to support the quality," Bennett said.

Though customized service helps create a strong, fresh image in the minds of consumers, certain limitations might prevent a retailer from operating a service deli sandwich program. But that doesn't mean a retailer can't sell sandwiches.

No Frills Supermarkets, Omaha, Neb., has created a plan that specializes in hoagies, according to Jim Weddle, director of deli operations for the 10-store chain with stores in Nebraska and Iowa.

No Frills' two-tier sandwich program consists of 6-inch hoagies and giant 12-inchers filled with ham and cheese, roast beef and cheddar, turkey and cheddar, and a ham/turkey and cheddar.

All are prepackaged, but this hasn't hurt sales. Weddle is currently in the process of building and expanding the program with more variety, and adding whole-wheat and marble-sliced bread to the mix. He's also looking into different types of packaging to cut down on the time and labor restraints -- two of his biggest limitations.

"In smaller operations, it's difficult to find the labor to get into a big sandwich market," he said. "You've got to have people to do the program and do it right for the program to be successful. With high turnover, it's hard to train people to be as efficient as we'd like. The sandwiches we do, we do right and do well."

Nevertheless, with just about every type of supermarket deli engaged in some sort of sandwich program -- and with fast-food restaurants developing their own concepts -- there seems to be a lot more between the bread than meets the eye. According to New York City-based Dianne Keeler Bruce, president of DKB Consulting, what's at work here is the busy consumer's demand for food-on-the-go that meets other requirements, such as healthier fare and variety.

"There's nothing you can't put into a sandwich," said Bruce, noting consumers feel they have greater control over their meals when they choose the ingredients for a custom-made product. "You can use all kinds of breads, roasted peppers, grilled mushrooms and ingredients no one would have thought of years ago. There are so many options, and that's what people like."

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