After some declining sales in the deli department at the end of 2023, the segment has rebounded nicely with improved year-over-year sales for the first quarter of 2024 compared to last year, according to the International Dairy Deli Bakery Association (IDDBA).
Of late, there’s been a notable transition towards healthier alternatives, including plant-based deli slices, reduced-sodium meats, and vegan cheeses. This shift is fueled by the increasing desire for options that promote well-being without sacrificing taste.
David J. Vana III, grocery category manager for deli at Southern California-based Gelson’s Markets, said consumer preferences have shifted towards healthier options with a focus on quality, freshness and convenience.
“There’s also been a rise in demand for artisanal and locally sourced deli items as consumers become more conscious of where their food comes from,” he said. “The demand for healthier deli options, such as plant-based or low-sodium products, has seen significant growth. This shift is driven by increasing awareness of health and wellness, environmental concerns, and dietary preferences like plant-based diets.”
Melissa Myres, director of insights at 84.51°, a Cincinnati-based research and insights firm and a unit of The Kroger Co., said shoppers list the top three reasons that are driving their decision to consume more plant-based alternatives are overall health, sustainability, and taste/flavor.
“[Some] 47% of shoppers claim that they read the labels—product benefits, claims, nutritional value, ingredients, etc.—when it comes to deli,” she said.
When it comes to food labels, Myres added, the following three are cited as the most important: Guaranteed Fresh (43%), Good for your Health (43%), and Nutritional Value (42%).
Leading growth
Jim Hopkins, deli and bakery manager at White Plains, N.Y.-based Krasdale Foods, a grocery distributor in metro New York, said the average consumer continues to prefer convenience options such as grab and go fresh-sliced cold cuts along with pre-made sandwiches, wraps and snack trays, all of which continue to lead growth in the deli category.
“We have seen a trend toward clean label all- natural products as well as lower sodium items growing in popularity,” he said. “Our stores continue to adapt to all emerging trends, regardless of socio-economic differences amongst the neighborhoods we serve.”
Tammy Gonzales, senior marketing manager for Cargill deli and prepared entrees, continues to see increased demand in grab-and-go deli products from the deli department.
“In response to food inflation, we are seeing consumers trade down to mid- and value-tier deli meat offerings and lower priced proteins,” she said. “This is putting more emphasis and importance on retailers to ensure they have the right balance of deli meat products across quality tiers.”
To keep up with the healthier trends, Gelson’s responded by expanding its offerings of plant-based deli meats and cheeses, as well as introducing more low-sodium, gluten-free, and pro/prebiotic options to cater to health-conscious consumers
“Gelson’s has always prioritized these tenets across the entire store, but we are most excited about the increased offerings of our Gelson’s-branded products that satisfy these needs, including the upcoming launch of three new Gelson’s Charcuterie SKUs,” Vana said.
Demographic shifts affecting the deli market include an aging population, changing household compositions, and increasing cultural diversity.
“Gelson’s seeks to bolster our assortment by expanding offerings that to cater to different age groups, income levels, and cultural backgrounds by diversifying our product selection, offering grab-and-go meal solutions for busy families, and providing options tailored to specific dietary needs or preferences, such as gluten-free or organic deli items,” Vana said. “Consumers are increasingly interested in exploring new and authentic culinary experiences, leading to the popularity of deli items inspired by cuisines from around the world, such as Korean bulgogi, Mexican carnitas, Middle Eastern falafel, and fresh Indian naans.”
The power of promotion
Promoting the deli and specials is an important part of improving sales—especially in a tight economy.
“With 79% of shoppers claiming they are noticing an increase in price at the deli counter, they are looking for ways to make their dollar go further,” Myres said. “We’ve found that 68% of shoppers say they always look for deals or promotions in the deli.”
Popular promotional preferences for the deli category include fuel point offers, utilizing the circular/weekly ad, digital coupons, weekly digital deals, and buy one-get one offers (BOGOs).
At Gelson’s, marketing and promotional strategies that have proven effective in driving deli sales include in-store tastings, targeted advertising campaigns, and custom in-ad features that provide customers with ideas for how to use new and exciting products at home.
“For example, our new West L.A. location hosts weekly events featuring sampling at our in-store wine bar, live cooking/tasting demonstrations, and other themed events to inspire customers,” Vana said. “Social media engagement continues to be of the utmost importance, so we partner with our brands to curate content that showcases new products, share recipes, and engage with customers to build brand loyalty and drive sales.”
Gonzales said shoppers are looking for convenience and affordability, so highlighting these solutions in messaging will help retailers market more effectively in their promotional messaging and deals.
“In addition, highlighting features like shelf-life, freshness, quality, portion control and ease of storage will also resonate well with shoppers,” she said. “Eye-catching displays with clear signage and engaging promotions will also draw shoppers in. Try incorporating interactive elements—like recipe cards or QR codes to help draw attention to products too.”
Digital marketing tactics such as cohesive omnichannel digital campaigns, social media support and influencer marketing continue to be driving forces behind sales lift results.
“Our marketing department has implemented 360-degree campaigns, including social media ads, influencer marketing partners, in-store push notifications and in-store radio ads, and have seen significant sales lifts during promotional periods,” Hopkins said.
Grocery TV, an in-store retail media network of more than 4,300 grocery stores across the U.S., recently conducted research on the effect of digitizing signage in different areas of the store and found that digital menu boards in the deli department ranked as the second most likely to have a positive effect on the shopper experience.
In fact, 86% of shoppers were either accepting or positive towards the introduction of digital menu boards in the department, with survey responses reflecting that people felt it was easier to view and learn about promotions.
Today’s supermarket delis are adapting to meet the evolving preferences of health-conscious consumers while leveraging innovative promotional strategies to drive sales and enhance the overall shopping experience.
