Smart Merchandising: Spotlight on the deli

Whether they need a wholesome dinner for the entire family or a small tray of sushi to snack on, time-starved shoppers often see their preferred grocer’s deli as a lifesaver. But with so many options from which to choose in the deli department — and a rumbling tummy demanding lightning-fast decision-making — retailers have just a small window of opportunity to communicate the value and goodness of their own-brand deli products here and get them into carts.

To see what retailers are doing well and not so well here, we visited the deli in three supermarkets: a Hy-Vee store in Sycamore, Ill., operated by West Des Moines, Iowa-based Hy-Vee Inc.; a Schnucks store in DeKalb, Ill., operated by Schnuck Markets, St. Louis; and a Kroger store in Ottawa, Ill., operated by Kroger Co, Cincinnati. Our visits took place in the early and midafternoon on a weekday in early April.

Hy-Vee

General observations: The deli of the Hy-Vee we stopped by is situated in the upper left-hand corner of the store (looking into the store from the front entrance). Permanent fixtures in the section are a larger one-sided open refrigerated case containing meals, sides, salads and desserts, and two smaller one-sided open refrigerated cases (placed side by side) containing dips, hummus, soups, salsa and bound salads. Foot traffic was moderate for the early afternoon.

Of the three stores we visited, the Hy-Vee had the widest selection of store brand prepared meals, sides and salads. In fact, almost all of the meals, sides and salads are under the retailer’s Hy-Vee brand. We also found some hummus, bound salads and more with a “Chef Mike’s” label, which is placed on products made onsite by the store’s chef, Mike Zoeller.

The upside:

• The section was clean, organized and well-stocked.
• The store boasts a wide array of prepared meals, sides and salads under its own brands. In fact, almost all of the meals and sides are under the Hy-Vee brand.
• We found handmade tags calling attention to a number of prepared meals and sides in the refrigerator case. A tag underneath trays of ribs read, “We smoke everything in house,” while one underneath trays of Mongolian beef advertised the dish as a best-seller.
• Some of the prepared meals in the larger refrigerated case are packaged versions of dishes that can be purchased at the in-store cafe. A few of them had tags posted underneath communicating this.
• The store placed “Did You Know?” signs to inform shoppers about its breakfast offerings at the in-store café.
• Along shelves, the store placed strips advertising Hy-Vee Hickory House smoked meats.
• On the top shelf in the refrigerated case, the store merchandised six-packs of beer under several brands, including Hy-Vee’s Baraboo Beer brand.
• In the middle of the deli, the store built a tower display that cross-merchandised Corona beer with Hy-Vee brand tortilla chips. We also found the tortilla chips on a rack display in front of the smaller refrigerated case, under which was a tag that read, “Our Tortilla Chips Are Fried Fresh In Store Daily.” (See picture, below.)

The downside:

• We couldn’t find a downside. The Hy-Vee boasts an expansive selection of own-brand products in the deli and merchandises them proudly.

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Schnucks

General observations: The Schnucks we visited is divided in two, with the right half of the store dedicated to perimeter departments (including the deli) and some refrigerated and frozen items, and the left half housing everything else. The deli is made up mostly of two refrigerated cases flanking both sides of the service deli: a long refrigerated case containing sandwiches, salads, take-and-bake pizzas and more, and a short one containing refrigerated meats, cheeses, dips and more. The section also contains a circular open refrigerated case with various meats and cheeses, a fresh soup and salad bar, and a small “Chef’s Express by Schnucks” to-go case mostly filled with packaged refrigerated soups. Foot traffic was very light in the deli area, likely because we entered right after lunch time had ended.

Of the three stores we visited, the Schnucks offered the fewest store brand items in its deli. We found take-and-bake pizzas, sandwiches, wings, veggie trays, dips, salads (bound and green) and a few meals under the Schnucks brand.

The upside:

• The section was fairly neat and organized.
• The store placed “Freshly Prepared” stickers on its own-brand sandwiches.
• We found bags of Schnucks brand croutons merchandised in a 10-for-$10 deal next to the soup and salad bar. (See picture, below.)
• Most of the packaged soups inside the to-go case were under the Chef’s Express brand.

The downside:

• Even though lunchtime had just finished and stock was low for a number of products, we didn’t see anyone replenishing these items.
• Though the other two stores offered hummus — a very popular product — under their own brands, the Schnucks didn’t.
• Atop the short, circular open refrigerated case, the store placed a small standup cardboard display with the Schnucks logo and recipe cards for a Wisconsin Cheese Fondue. However, the recipes didn’t contain any store brand ingredients.
• Though the Chef’s Express case was dominated by own-brand refrigerated soups and featured only two national brand soups (both under the Panera Bread brand), the two Panera soups were supported via a shelf talker underneath, while the Chef’s Express soups had no support.

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Kroger

General observations: The Kroger we stopped by houses its deli on the lower right-hand corner of the store (looking into the store from the front entrance). The deli is made up of a service deli/service hot bar with refrigerated shelves at the foot holding packaged meals, sides and more, as well as a circular refrigerated case. Foot traffic was very light in the deli area, likely because we entered after lunch time had ended.

Most private brand products in the Kroger’s deli are under the [email protected] brand. We also found some dips and bound salads under the Kroger brand, meats and cheeses under the Private Selection brand, and all-natural rotisserie chicken under Simple Truth, Kroger’s brand of natural products.

The upside:

• Of the three stores we visited, the Kroger is the only one to offer a store brand dedicated exclusively to packaged deli products ([email protected]me). Packaging across the brand sported similar colors, making the brand easy to spot in all sections of the deli. (See picture, below.)
• On the glass in front of the serviced hot bar, the store placed a “Fresh ideas for dinner tonight” sticker advertising [email protected] rotisserie, fried and baked chicken.
• The store stood a sign with a picture of a rotisserie chicken to advertise the Simple Truth and Simple Truth Organic brands and 100 new products under the brand. It invited shoppers to order products online.
• At the end of the deli and near the cash registers, the store placed a warming cart with several packaged [email protected] products, including rotisserie chicken pieces and sides. We spotted another “Fresh ideas for dinner tonight” sign on top of it.
• Though many store brand products in the deli did not have national brand counterparts, the store placed a few Private Selection products next to their national brand counterparts with an attractive price gap. For example, a Private Selection brie round sold for $4.99, while its President counterpart sold for $6.69.

The downside:

• No downsides here. We were quite impressed with the wide selection of private label products and how well the store puts them at the forefront in the deli.

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Merchandise like a true brand

Even though more shoppers than ever are purchasing store brand products, private brands are receiving below average merchandising support in stores, says Jeff Schwartz, national sales manager, private label retail with West Liberty Foods, West Liberty, Iowa.

“Many retailers still view private brands as a me-too value proposition,” he states. “However, if these private brands were merchandised with similar support as the national brands, the growth potential is here.”

For instance, retailers such as Whole Foods, Dierbergs Markets and Kroger have been sure to source private label cheeses bearing the Wisconsin Master’s Mark, which highlights a cheese’s quality, says Marilyn Wilkinson, director, national product communications with the Wisconsin Milk Marketing Board, Madison, Wis. The mark communicates that the product’s maker graduated from the Wisconsin Master Cheesemaker advanced training program for veteran cheesemakers.

“Whether on point-of-sale materials … or prominently displayed on cheese packaging, the Wisconsin Master’s Mark serves as a point of differentiation to add value to their cheese display,” she says.

Recipes also are a great sales-builder, Wilkinson states.

“With so many new cheese varieties and styles on the market, the shopper has a multitude of choices,” she says. “Our research tells us consumers want to try new cheeses, but often don’t know how to use them. So incorporate easy recipe and serving ideas in your cheese merchandising and packaging.”

It also helps to communicate products that are made in the store with tags and signs that say “homemade” or “ours,” states Alan Hiebert, senior education coordinator with the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA).

“But be sure that the people working the department know their products,” he says. “IDDBA believes that all associates in service departments should be trained in food safety, customer service and product knowledge — especially for those items that bear the store’s name.”

Speaking of knowledge, it’s important for retailers to educate health-conscious consumers about better-for-you store brand items in the deli — and direct them to those products, Hiebert says.

“Information needs to be available on signs in the store; the deli staff needs to be trained; and additional information should be available online,” he states. “Shoppers are concerned with things like added sugar, genetically modified ingredients, high-fructose corn syrup, the sodium content of their food, and trans fats. If shoppers don’t get the information they’re looking for at one store, they’ll go to another.”

And don’t forget about packaging. Shoppers want their deli products to be as fresh as can be at purchase. Therefore, retailers need to keep innovating with their packaging to make sure it keeps contents fresh for as long as possible,” Schwartz explains. SB