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Fresh food sales on the rise, especially online
Some 40% of online sales are being generated by fresh foods departments, suggesting a major change from previous trends
3 Min Read
Surveyed retailers indicated that they’re making investments for fresh foods departments in-store, but additionally report an increase in the amount of fresh foods sales online.Getty Images
TOP TAKEAWAYS
Food retail sales for many fresh departments were up significantly from 2019 to 2021, based on IRI data. Seafood experienced particularly strong growth over those two years, at 31%. Fresh foods (perishables) outperformed non-perishables in the past year
Meat and produce lead other perishables areas in terms of average share of store sales by fresh department. The biggest share of overall sales is in dry grocery, including general merchandise and nonfood, at 42%
With online sales for fresh foods and beverages accounting for just over 40% of total sales for food retailers, the share of total department sales made online remained a fraction – albeit a growing share – of total department sales
Fresh foods sales are up, and especially online — one of the most significant findings in a new report from The Food Industry Association (FMI).
Some 40% of online sales are now being generated by fresh food departments, suggesting a change from previous trends, according to the data, which comes from the company’s inaugural The State of Fresh Foods report, which highlights findings from the-soon-to-be-released The Food Retailing Industry Speaks 2022 analysis.
Surveyed retailers indicated that they’re making investments for fresh foods departments in-store, but additionally report an increase in the amount of fresh foods sales online.
“The pandemic changed Americans’ grocery shopping and cooking habits, with more of us enjoying meals at home with family members,” said FMI President and CEO Leslie Sarasin during a recent event. “These broad-level changes particularly impacted fresh foods departments, and even as we shift to more in-person activities, shoppers continue to rely on their grocery stores for fresh food items.”
Other highlights from the report include:
Online share of sales by fresh categories: Fresh food offerings are becoming more prominent players in ecommerce. Fresh or perimeter departments now comprise 40% of all online sales, rivaling dry grocery online sales (41%) and surpassing frozen online sales (11%).
Enhanced space and staff for foodservice: Food retailers are re-envisioning fresh foods departments with enhanced space allocation and increased staff. Eighty-two percent are planning to grow the space allocation for fresh-prepared grab-and-go options, while others are increasing space for fresh-prepared chef made-to-order stations (35%) or fresh-prepared self-service (29%).
Retailers are also increasing staff for foodservice (44% of retailers planning), trained or certified chefs (22%), in-store dining (20%), and scratch bakers or pastry chefs (18%).
Food retailers experiment with foodservice experiences: Food retailers surveyed are getting creative with their service differentiation strategies by experimenting with new consumer touchpoints, like in-store dining (51%), a coffee bar (39%), online ordering and pickup/delivery of foodservice offerings (33%), catering services (30%), a juice bar (20%) and a full-service restaurant (13%).
However, the success of these programs has been mixed. Retailers report a success rate of as high as 60% for juice bars to as low as 13% for online ordering and pickup/delivery of foodservice offerings, revealing an opportunity for retailers to explore other specialty options.
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