It is a fruitful time to be a produce merchandiser.
With category sales on the upswing and shoppers becoming increasingly health-conscious, the sector is ripe for ongoing growth, analysts said. “Consumers continue to tell us they intend to eat more produce and are looking for more whole foods in their diet overall,” said Sherry Frey, vice president of total wellness for NielsenIQ, a New York-based consumer intelligence firm.
Unlike many other food categories, produce activity is on the upswing despite rising product costs. Unit sales rose 1% for the 52 weeks ending May 18, while dollar sales had a 2% gain with an average unit price increase of 2%, NielsenIQ reports. Produce and baby care are the only two departments across the store seeing both dollar and volume increases, NielsenIQ notes.
Yet, merchandisers cannot take such expansion for granted. Price and assortments remain vital purchasing variables and will be key in determining if growth will be ongoing, Frey said.
“It’s not always about more selection but the best selection for the current and potential shoppers,” she said. “It’s also not always about large displays of produce but rather well-maintained, well-trimmed and unspoiled produce.”
With limited merchandising space, it is crucial that retailers reduce assortments that are underperforming while offering such attention-grabbers as limited time items, including both seasonal and specialty selections, and ensuring that the products “are being seen by consumers,” Frey said.
Because many inflation-wary shoppers are fixated on cost, certain produce items are in strong position for sales growth, she said, noting that there have been recent price decreases for such selections as strawberries, apples, and broccoli.
“Consumers have been challenged with the compounding effects of inflation over the last couple of years and have become more conscious of the overall price of their basket as well as specific items,” Frey said. “Bulk options in produce enable consumers to choose how much they specifically need and how they can manage their shopping budgets.”
In addition to offering attractive prices, there is strong incentive for retailers to provide the most pertinent options for a wide range of shopper segments, including online customers, she said.
“As consumers continue to shift to online purchasing of groceries, the challenge for the entire store is to deal with the transactional nature of online,” she said. “Consumers rebuy their list over and over and are less likely to have impulse purchases.”
Ensuring that online produce selections are of the “upmost quality” is pivotal for ongoing activity, along with the use of digital technologies to present shoppers with purchasing suggestions and options, Frey said.
