WAL-MART

CHRISTINE BLANK

ORLANDO, Fla. - Wal-Mart Stores plans to build up the selection of entrees, side dishes and healthy prepared foods in its store delis, according to a Wal-Mart executive.

While rotisserie chickens are still the retailer's most popular deli item, selling 100 million a year, the retailer wants to add other types of prepared entrees to the mix, said Peter Redmond, vice president and division merchandising manager, seafood and deli, for Wal-Mart, who spoke on a panel of food-service and supermarket executives at the Refrigerated Foods Association's Annual Conference & Tabletop Display here.

Refrigerated pizzas are another fast-growing product for the delis, he said.

"In our hot case, we are looking for a protein that isn't fried, and preferably not chicken," Redmond said. "Smithfield entrees - whole, fully cooked pieces of meat - are growing [as is] the rest of our deli."

Indeed, retailers could benefit if they added a pot roast, lamb shank or other meat that has to be cooked for a long time, noted Steve Schimoler, director of innovation and product development for NestlT USA. "To do a proper pot roast takes hours," he said.

For shoppers who want a complete meal, the delis let them mix and match entrees and side dishes, another growing area for Wal-Mart. Side dishes are placed in the case next to chicken and other main dishes.

Wal-Mart is also focusing on improving the nutritional profile of its deli foods, Redmond said. In the deli case, Wal-Mart wants to move toward food with less salt and fat.

"You could get 60% to 80% of your [recommended daily allowances] in salt in one serving [in some deli products]. We're trying to reign in some of that," Redmond said.

While Wal-Mart is looking more closely at health and wellness items, that doesn't necessarily mean all organic and natural products will work. There is a buzz around organic and natural, he said, but sales are not even close to non-organic items.

Meanwhile, fresh, packaged salads are "doing incredibly well," Redmond said. The biggest growth area for Wal-Mart is kit salads, which present a "fresh look for us, more of a premium look," he said.

Another growth area in the deli is pizza, which was added recently. Retail prices start at $7.99.

Executives were surprised that the item was popular right away. "We sell over $1 million of it a week. It's a huge success for us," Redmond said.

And the increased refrigerated pizza sales did not come at the expense of frozen pizzas. Sales of those items increased at the same time, he said.

Redmond said he has noticed orders for sandwich meats have slowed down, while sales of "all convenience items are booting up."

"The ones you have to get service for are slowing," he said.

Redmond also encouraged new refrigerated foods suppliers at the conference to do business with Wal-Mart. Food-service suppliers, in particular, collaborate well with the retailer when developing new deli items, he said.

"There is a huge misconception that it is impossible to deal with someone the size of Wal-Mart. There are some small companies that we do business with very well. There is no barrier to entry," Redmond said.

An industry consultant on the panel encouraged retailers to get more competitive with the food-service sector.

Supermarket delis have not reached their potential when it comes to selling complete meals, he noted, adding retailers could learn something from restaurants as far as bundling meals goes.

"The thing that the restaurant industry does well is the bundling of meals," said Steve Dragoo, president, Service Solutions Consulting, Franklin, Tenn. "If [supermarkets] don't bundle, people will stop somewhere else on the way home to buy sides."

Retailers would be wise to expand beyond potato salad and coleslaw, he added. "People are experimenting with different flavors of pasta salad," Dragoo said.