MEATY TEST FOR CATEGORY MANAGEMENT

MINA WILLIAMS

Sweeping changes are in store for the meat department, said industry participants in a test of category management technology for fresh meat.

The tests are still under way at a handful of store operators, including chain stores and independents linked to wholesalers. The category management case studies are part of a program orchestrated by the Meat Board, Chicago, to improve meat sales and profitability. Formal results will be released later this year, said organizers.

For the case studies, the participating supermarket operators are making sure all fresh meat items have a UPC code. In addition, using front-end scanning data, they are applying computerized category management techniques to refine product mix and promotion strategies.

Two of the participants -- Fiesta Mart, Houston, and Fairway Foods, Bloomington, Minn. -- shared their expectations with SN. The impacts on operations presage the department's entry into the modern age of food retailing, the testers said.

"We used to research each item using a pencil," said Pete Lara, meat supervisor and buyer at Fiesta Mart. "Now we are able to use computers and scanning data. Now we have a department with the ability to use category management to track merchandise and adjust our product mix accordingly," said Lara.

Similar changes are being noted in the upper Midwest by the retailers working in concert with Fairway Foods.

"Tracking information and getting better information removes the pressure on the retailer to do what the guy down the block does, and focus more clearly on his own operation and what works there," said John Story, senior director of meat and deli operations at Fairway. "What we will see is an upgrading of the minds of the meat department managers when the results are in."

The meat executives also said they are hopeful that a category management approach to the meat department will help them make better buying decisions.

"The result of the study will be giving our departments the assistance needed to run smarter, not shooting from the hip," said Lara of Fiesta.

Currently, scan data is not being used by retailers because meat departments do not know how to use it, according to Story. "By having this model, we are now able to evaluate items, evaluate turns and profitability of items. We are starting to manage by category."

This trend will give retailers the encouragement to take on items that are case-ready, including ground beef, Story said.

"We are now more aware of the mix of the department," said Lara. "The study has also helped in assisting us write better ads, and in opening up space for products that give us a better return of profit. We now know how to allocate valuable space to the good products."

Adjusting product mix, adding new items and creating the weekly advertisement are the three changes retailers hope to see in their goal of boosting meat department profits with category management.

They added that they expect the case study series to have the greatest positive effects on how retailers approach the question of what to put in the weekly ads. Using the power of analyzing scanning data will improve the advertising style and item selection, they said.

"We used to be price- or cost-advantage driven to a featured item," said Story. "Now the retailer can determine [what item to feature], using data, if the item fits the season, if that is the approach you want to give the customer; and can estimate if an item will actually cost more."

"Using this program, we are trying to get away from the monkey-see, monkey-do approach to merchandising," Story said.