Findings:
Sales momentum in fresh food categories has slowed due to inflation and economic concerns.
48% of retailers and wholesalers reported increased sales in the past 12 months, down from 60% last year.
Despite the slowdown, 56% of retailers and wholesalers forecast sales gains in the year ahead, down from 65% last year.
Prepared foods remain the most important perimeter category for retailers and wholesalers.
Many retailers reported double-digit sales gains in their fresh departments, with prepared foods and high-quality produce leading the way.
Retailers plan to increase their assortments of prepared foods, produce, deli, bakery, and meat/seafood in the year ahead.
The expansion of fresh departments will come at the expense of space devoted to center store categories for 42% of retailers.
Salad bars are making a comeback, with 10% of retailers planning to add them in the year ahead.
Retailers are also adding grab-and-go cold cases, full-service coffee shops, and full-service cafes.
Prepared foods are becoming increasingly profitable for retailers, with 44% reporting margin improvements in this category.
Retailers face competition from fast-casual restaurants, traditional fast-food restaurants, club stores, home cooking, big-box retailers, convenience stores, natural and organic food retailers, online retailers, and meal kits.
Price and convenience are the biggest advantages that these competitors have.
Retailers can compete by offering promotions, specials, grab-and-go offerings, click-and-collect order-ahead capabilities, cleaner ingredient lists, and specialty diet or meal selections.
Value-added meats are helping to drive sales in the meat/seafood department.
Some retailers have noticed improvements in the supply chain, while others are still experiencing issues with the quality and shelf life of imported produce.
Big-box stores, club stores, dollar stores, online retailers, and natural/organic retailers are the biggest competitors for retailers in fresh departments overall.
Price is the key competitive advantage that retailers have.
Reducing food waste, minimizing shrink, improving labor productivity and retention, and increasing the perishables assortment are the top goals for retailers and wholesalers in the year ahead.
Staffing concerns remain the most significant challenge that retailers face in their perimeter departments.
Key Takeaway:
Despite a slowdown in sales momentum, the perimeter of the store remains a key area of focus for retailers and wholesalers. Prepared foods are driving growth, and retailers are investing in new products, services, and technologies to meet the changing needs of consumers.
Trend:
The trend is towards a greater emphasis on fresh foods, prepared foods, and convenience. Consumers are looking for high-quality, convenient meal solutions, and retailers are responding by expanding their offerings in these areas.
Consumer Motivation:
Consumers are motivated by a desire for convenience, health, and value. They are looking for ways to save time and money while still eating healthy and delicious meals.
Driving Trend:
The trend is driven by several factors, including:
The increasing demand for convenient meal solutions
The growing popularity of healthy eating
The rise of food delivery and online grocery shopping
The increasing competition from restaurants and other foodservice providers
Target Audience:
The article is targeted towards retailers and wholesalers in the grocery industry.
Product/Service Description:
The article discusses a wide range of fresh food products and services, including prepared foods, produce, deli, bakery, meat/seafood, and floral.
Conclusions:
The perimeter of the store is a critical area for retailers and wholesalers to focus on. By investing in new products, services, and technologies, retailers can meet the changing needs of consumers and drive sales growth in their fresh departments.
Implications for Brands:
Brands need to develop innovative and convenient fresh food products that appeal to consumers' desire for health, convenience, and value. They should also invest in marketing and promotional efforts to highlight the benefits of their products.
Implications for Society:
The increasing focus on fresh foods and prepared meals could lead to a healthier and more convenient lifestyle for consumers. It could also create new jobs in the foodservice industry.
Big Trend Implied:
The biggest trend implied is the growing importance of the perimeter of the store in the grocery industry. As consumers continue to prioritize convenience and health, retailers and wholesalers need to invest in their fresh departments to remain competitive.
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