SEAFOOD SECTION AWASH IN QUESTIONS OVER SERVICE OPTIONS

NANCY GRIFFIN

To serve or not to serve?

That question is on the minds of many supermarket seafood managers today, as some stores make the switch from full-service departments to self-service.

It is not an easy question to answer, said retailers and industry experts. Full-service is perceived as more costly, but also as more likely to generate sales for an important category, one with which consumers often need some encouragement.

Self-service counters are increasingly being considered as generating higher profits. But that honor may be dubious if department volume does not go along with it.

"Full-service is very expensive and unprofitable if you don't do it right," said Tim Hebert, former retail seafood specialist for Harris Teeter, Charlotte, N.C., now an industry consultant in North Carolina.

"If a store has no seafood volume potential, then self-service may make sense," he said.

Statistics show that, nationally, full-service is sliding, said Mike Bavota, seafood merchandiser for Kash n' Karry, Tampa, Fla., and a former seafood operations trainer for the U.S. Department of Commerce.

In 1991, Bavota said, 78% of supermarkets had full-service seafood counters up and running. By 1994, however, that figure had dropped to 67%, which means self-service counters during the same time increased from 22% to 33%.

This type of shift may actually be holding overall seafood sales back, according to Karla Ruzicka, deputy chief of USDC's National Training Branch in Gloucester, Mass. "The annual seafood sales per [supermarket] customer were the same both years [1991 and 1994], at $5.91, and the percentage of store transactions that included seafood also remained static, at 6.5%," said Ruzicka, whose outfit has offered a Seafood Splash retail training workshop for six years.

"The lower number of sales usually associated with self-service seafood counters and the increase in the numbers of those counters, may be one reason overall retail seafood sales didn't increase during those years," Ruzicka added.

A Better Homes and Gardens consumer survey published in 1993 corroborates several smaller consumer surveys taken in recent years. The survey said 75.9% of consumers prefer to purchase seafood at full-service counters and only 22.7% prefer self-service.

So, if customers prefer full-service and self-service means a smaller number of sales, albeit slightly more profitable ones, why are at least some retailers switching?

"It's a result of downsizing generally, and because many retailers don't believe seafood is profitable," said Guy Forbes, seafood director for Carr Gottstein Foods in Anchorage, Alaska.

"Sometimes you have to sacrifice a little of the bottom line to meet your customers' needs," said Forbes, a big fan of full-service seafood counters.

"We do that in the baby food department, for instance. You don't make money, but you know it is something you have to do. I think 15 years ago, retailers thought they could make 30% on seafood with full-service counters, but usually you can't.

"It's an all-day job getting fresh product and taking care of it, but it's worth it," Forbes said.

At least some think so.

"You can still find some stores going full bore putting in full-service counters," said Hebert. "There are no boilerplate solutions. Stores are trying to determine volume and demographic characteristics to decide on their seafood format."

Some chains see its worth as a point of difference. "In the Northeast, customers perceive seafood as fresh, and on ice, so we don't do much with self-service here," said Joe Callanan, category manager for seafood at Shaw's Supermarkets, based in East Bridgewater, Mass. "We will put out some prepackaged seafood during the Lenten rush. But I've gone out to look at the competition's self-service cases. You see something in there on Monday, go back in Wednesday and it's still there. That stuff's never going to move."

Big Bear, Columbus, Ohio, is also holding on to its service cases. "The switch is going on all through the Columbus areas. I've taken it as a challenge to make our service departments stronger than before," said John Little, buyer with the chain of 77 stores, 52 of which have service seafood with 12-foot to 16-foot seafood cases.

"In a market as competitive as ours, we feel it's a merchandising tool," said Little. "A lot of our clientele don't understand the fluctuations in the seafood market, supply and demand, seasons, that cause retail prices to go up. With full-service, they can get feedback from a clerk.

"Most clients are not really comfortable with seafood -- how to buy it or cook it -- so we make lots of resources available.

"It's hard to get an expert behind every counter because we're in the fast-food capital of the world here, unemployment is less than 4% and it's hard to compete for employees. But we work all our in-house experts all the time," said Little.

"I think the real future for a lot of stores is a combination of self-service and full-service," Hebert said.

At Tidyman's in Greenacres, Wash., "We've integrated the two," said Bob Flores, a seafood manager.Flores recently helped open a new Tidyman's in Spokane with two large, full-service ice tables, an 8-foot refrigerator case and a frozen case in the seafood department.

"We've combined the two in this store," said Flores. "I'm really pro ice-table and customer service. One of our stores pulled the service counter, but went back to some limited service because of customer demand and loss of sales."

His seafood departments often have shown profits of up to 27%, he said. The grand opening promotion for this new store included a "Buster the Crab" promotion featuring a 12-foot inflatable crab and a $2.99 a pound price on Dungeness crab that helped him move nearly 5,000 pounds.

"That's usually our Christmas peak," said Flores. "We were just shy of 4% of total store distribution."

Still, in some stores Tidyman's is making "a hard lean toward self-service," Flores added.

Flores and others insisted, however, that well-trained service people are crucial in guarding against the specter of a "bad seafood experience" with customers.

Bavota of Kash n' Karry said, "The seafood department may not be the reason customers come to your store, but give them a bad seafood experience, and it'll be the reason they don't come back."

Tim Kean, merchandiser for deli, bakery and seafood for Pay Less Supermarkets, based in Anderson, Ind., agreed. The eight Pay Less stores are evenly divided between self-service and full-service seafood counters; but two stores opened last year have full-service counters, replacing two older stores with self-service counters.

"It depends on the volume level you can operate. If you hit a certain volume, it can be profitable, so you aim for a certain volume level to offset the labor costs," said Kean.

"You probably won't make money if you sell product at the same price you do at a self-service counter. But there's no doubt a service department will do more volume than a self-service department. If you're looking for sales, full is the way to go. If you're looking for profits, you have a question to ask yourself: Do you want to put out the effort to get the volume to make profits?

Pay Less has been working on the seafood equation since 1987.

"We tried all kinds of marketing devices, we ran the gamut of everything including advertising hot prices," said Kean. "We found we had to get serious about selling seafood at a fair, not cheap, price and sell it on its attributes. What works best is doing a thorough job of answering people's questions on how to prepare it."

Flores said "I think it's important not to be a flash in the pan. I have customers come and tell me they love the seafood department. It's important to build a clientele."

Flores wouldn't get an argument from Larry Daerr, seafood specialist with the Pittsburgh division of Supervalu, Minneapolis.

"I hate to lose a service counter to a self-serve. We lost two last year, but we gained three upgrades to full-service," said Daerr. "Ours are 60% self-serve because we don't have the volume, but the ones that are full-service are doing very well."

Daerr is a perfect example of what the consultants always tell retailers about service seafood counters: hire a good personality.

"I like the service end myself because of the one-on-one with the customer. With self-service, you have to rely on their ability to cook or to find recipes you may have out in the department."