Prepared Food Sales Up During Holidays

CHRISTINE BLANK

Although financial experts had warned that consumers might spend less during the 2007 holidays due to high gas prices and other financial concerns, many supermarket prepared foods departments enjoyed a great season.

Some supermarket food-service directors told SN that their sales of fresh prepared foods enjoyed double-digit gains in 2007 over 2006, thanks in part to new ordering options, new food offerings and prepared foods' long-standing benefit: saving shoppers time.

“Customers put a lot of emphasis on family time and how important it is to them, and they don't necessarily want the stress of doing all this meal prep themselves,” said Tanney Staffenson, partner and operations director for Lamb's Markets, a five-store chain in Wilsonville, Ore.

“Shoppers' focus was different this year,” agreed Diane Earl, director of deli food-service operations for United Supermarkets, Lubbock, Texas. “They wanted to have a great holiday, but they didn't want to spend it all in the kitchen.”

As a result, volume sales of prepared holiday foods in United's healthy and gourmet Market Street stores jumped 10% in 2007. At the same time, executives had raised Market Street's holiday prepared foods prices around 10%.

“We had a great year. We were very pleased,” Earl said.

In addition to being busier, many shoppers do not know how to prepare certain holiday foods, such as turkey, and are looking to the supermarket for help, retailers said.

“Compared to years ago, when people grew up cooking, they might not know all the things to do. They might never have cooked prime rib, for example,” Staffenson noted.

As a result, Lamb's introduced a new item in its holiday meal offerings this year that was very popular with shoppers. Instead of offering just a precooked turkey or a turkey dinner, the store added a cooked and deboned turkey. It was an instant hit, proving to be one of the most popular single items on the chain's menu.

The deboned turkey retails for $4.99 a pound, which on average works out to $14 per bird, while Lamb's turkey dinner retails from $69.99.

“It is a relatively expensive item, but obviously people don't want to prepare it themselves,” Staffenson said.

Sales of all holiday prepared foods at Lamb's rose 8% during the 2007 holidays, compared with 2006, and catering sales were also up 8%.

In addition, the stores raised retail prices on prepared foods about 10%, which did not impact sales volume. Thriftway Foods pushed prices up slightly to take advantage of the short, but very important, Thanksgiving and Christmas time periods.

“It is an opportunity that you really want to seize when you can. At Thanksgiving and Christmas, you are not competing with the restaurants, because people typically don't go out to eat for Thanksgiving and Christmas,” Staffenson said.

Sales of holiday prepared meals also rose about 30% for PCC Natural Markets in Seattle. While it maintained its traditional turkey and ham dinner offerings, the chain had success by increasing the portion sizes of its sides.

“The local paper does a rundown of all the holiday meals — including sizes — in the area, and ours was the best deal around,” said Jan Thompson, deli merchandiser for PCC Natural Markets.

Its large turkey dinner, which feeds eight to 10, retails for $119.99, and its small turkey dinner, which feeds around six to eight, retails for $69.99. PCC's ham dinner sells for $69.99, and its prime rib dinners sell for $99.99 and $129.99, for small and large sizes.

At the same time, PCC Natural Markets does not count on holiday dinners for extra profit. “We don't make any money off of it, but our CEO wants to make it a good thing for the community,” Thompson said.

About 25% of prepared holiday meal sales at PCC Natural Markets originated from online orders in 2007.

“We sold online for the first time this year, and that increased sales. We're a techie town — Microsoft is here — and people are really comfortable with it,” Thompson said.

Market Street also found success with traditional favorites. Its turkey dinner, which retails for $79.00, was the best seller, but its ham dinner and prime rib dinner, which also retail for $79.00 each, were also popular.

Even though the chain did not add new food options during the 2007 holidays, Market Street did “tremendous volume” with its Carry-Out Catering service, which allows shoppers to call in their prepared food orders, fill them out online or place them with each store's concierge. Sales netted by the service were up 4% in 2007 vs. 2006.

“This was the first year we offered online ordering, and it was successful. It will continue to grow,” Earl said.

While all types of holiday foods were popular, Earl noticed shoppers ordering a lot of whole pies and whole desserts — a part of the meal they did not want to make themselves, she said. Similarly, items that helped simplify holiday entertaining — such as deviled eggs, homemade cheese balls, bread bowls with dips, and cheese boards — enjoyed a boost this year.

“This past year, we increased our specialty cheese training for everyone, and specialty cheese was probably the biggest dollar volume increase that we had, at 12%,” Earl said.