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Going strong.

Shoppers had mostly good things to say about bakeries and delis last year--and they put their money where their mouths were. Both departments posted strong performances, with sales up 4.5% in the deli and 6.9% in the bakery. Both gains were significantly above those posted by the supermarket as a whole and were tops among the perishables departments.

Clearly shoppers are past the skittishness they displayed a few years ago, as the poor economy caused them to tighten their purse strings and cut back on their foodservice spending. For the past few years, shoppers have shown renewed confidence in the economy and have returned to delis and bakeries.

But the economy is not the only factor at work. Supermarket operators have responded to consumers' ever-increasing desire for convenience by shifting the product mix to more self-service and prepared items. Foodservice has also become a key ingredient in many grocers' competitive strategies. A showcase deli and bakery can set their stores apart from the growing number of retail channels and category killers.

Overall, shopper frequency in the deli and bakery remained strong throughout the country last year. However, the Northeast continues to dominate when it comes to deli shoppers. This is no doubt a reflection of the fact that delis have been long-established in supermarkets in that part of the country. In other areas, such as the South, they are somewhat newer to supermarkets.

There's no question that women remain the primary shoppers, both overall and in the foodservice areas. It's still rare for men to do the shopping by themselves, although in recent years there has been some increase in the number of men who go along on the trip.


Most customers who shop one foodservice department shop them all at least some of the time. For instance, more than half of frequent bakery shoppers also shop the deli and almost two-thirds of frequent deli shoppers shop the bakery as well. That trend carries over to the satellite sections, such as salad bars, prepared foods and cheese shops, although to a lesser degree.

Prepared foods, in particular, continue to grow, as an increasing percentage of both deli and bakery shoppers say they shop that section at least occasionally. However, frequent deli shoppers tend to be more likely than bakery shoppers to shop cheese sections. An equal number of frequent deli shoppers and frequent bakery shoppers also buy from the salad bar.

This shopping pattern offers supermarket operators plenty of proof that they would do well to position and merchandise the sections as one, rather than individual departments. Increasingly, that is occurring, particularly in new stores, as retailers design a total foodservice operation. The newest Price Chopper Marketplace in Overland Park, Kan., for instance, devotes a huge section of floor space to its foodservice area, which includes a sit-down section and a bagel and coffee bar (see "The GOLD standard," page 48).

Family size clearly plays a role in deli and bakery shopping. The patterns in this regard have been quite consistent for a number of years. Small families, particularly two-person households, have long been the primary foodservice customers. These shoppers may be the most likely to appreciate the convenience of deli and bakery products and be willing to pay for that convenience. Large families, no doubt more budget conscious, seem less willing to pay for the convenience of prepared foods and the like.


Foodservice shoppers share the wealth % shopping
                 Most of the time    Occasionally    Almost never
                  1993     1994      1993   1994     1993   1994
Service deli
All shoppers      37%      34%       41%    41%      22%    25%
Bakery shoppers   51       55        39     35       10     10
Service bakery
All shoppers      40       41        46     45       14     14
Deli shoppers     55       63        39     28        6      9
Salad bar
All shoppers       6       13        29     34       65     53
Deli shoppers      7       22        31     33       62     45
Bakery shoppers    7       20        28     32       65     48
Prepared foods
All shoppers      16%      13%       40%    43%      44%    44%
Deli shoppers     27       22        40     52       33     26
Bakery shoppers   26       23        39     48       35     29
Cheese shops
All shoppers      23       21        40     46       37     33%
Deli shoppers     34       42        43     45       23     13
Bakery shoppers   33       27        46     44       21     29

Deli and bakery products don't always come cheap, so it's not surprising that frequent foodservice customers tend to have somewhat higher incomes than the average shopper. Deli shoppers, for example, earned on average nearly $5,000 more than the average for all shoppers.

Overall, more than half of shoppers said they spent more in supermarkets last year vs. the previous year. Judging by the sales increases in the deli and bakery, at least some of that added money was spent on foodservice items--a positive note for retailers, considering the high margins on many deli and bakery products. The downside is that supermarket operators are having a tough time finding and keeping good deli and bakery employees, a situation that will only get worse if the economy and sales in those departments stay strong.

Spending jumps

% of income spent in the supermarket compared with a year ago
               1993    1994
Spent more     41%     55%
Spent same     44      27
Spent less     15      18


While the bulk of deli and bakery shoppers are between 30 and 49 years old and may have one or two children, seniors comprise a significant group of foodservice shoppers. As the population continues to age, they will grow in importance.

Some supermarket operators are recognizing this fact and tailoring their product mix to suit these shoppers. Smaller packages--with, say, two or four muffins rather than six or eight--appeal to seniors. Health-oriented items, such as those low in fat and cholesterol, are also popular with these customers. Strong merchandising of these items should help, attract this growing group of shoppers.


While supermarkets clearly hold the edge as the outlet of choice for shoppers overall, other retailers have been making inroads. To some degree that's true with frequent deli and bakery shoppers, as well. Yet foodservice shoppers actually spent less than the average shopper in both fast-food restaurants and mass merchandisers last year--a positive sign for supermarketers. Prepared foods may be the key to continuing this trend, as supermarkets improve the quality and quantity of their offerings.

Splitting the food dollar Shopper spending pattern at supers and


All shoppers
                           % of all       Amount spent by
                          consumers        all shoppers
Type of outlet          shopping outlet       weekly
                        1993     1994      1993     1994
Supermarkets            100%     100%     $71.34   $71.17
Convenience stores       51       44       11.28    14.13
Fast-food restaurants    68       60       17.72    18.06
Mass merchandisers       71       57       28.50    33.76

Deli shoppers
                           % of deli      Amount spent by
                          consumers        deli shoppers
Type of outlet          shopping outlet       weekly
                        1993     1994      1993     1994
Supermarkets            100%     100%     $77.85   $78.34
Convenience stores       53       51        9.49    14.07
Fast-food restaurants    79       67       20.55    14.15
Mass merchandisers       81       61       30.60    30.93

Bakery shoppers
                           % of bakery    Amount spent by
                           consumers      bakery shoppers
Type of outlet          shopping outlet       weekly
                        1993     1994      1993     1994
Supermarkets            100%     100%     $78.96   $74.04
Convenience stores       46       47       11.09    15.33
Fast-food restaurants    71       66       24.46    14.69
Mass merchandisers       77       67       32.94    30.72

While frequent foodservice customers are different from typical shoppers in some ways, they also share plenty of similarities. For example, they are just as prone to deviate from their shopping lists and make an impulse purchase. For that reason, supermarket operators should use the same merchandising tactics in the deli and bakery that they do in other sections of the store. Mass displays, feature prices and sampling are all apt to boost impulse buys in the foodservice department as they are in grocery or elsewhere. These shoppers are also just as likely as other shoppers to read newspaper ads and circulars, so the deli and bakery shouldn't be left out of advertising plans.

Foodservice shoppers: Big on impulse % saying
                  Almost                              Almost
                  always  Frequently   Occasionally   never
Feel completely satisfied
All shoppers       31%       41%         24%           4%
Deli shoppers      26        48          23            3
Bakery shoppers    31        40          28            1
Plan a menu
All shoppers       20        16          30           34
Deli shoppers      21        12          39           28
Bakery shoppers    22        20          32           26
Deviate from shopping list
All shoppers       18        29          41           12
Deli shoppers      20        28          43            9
Bakery shoppers    22        34          34           10
Make an unplanned impulse purchase
All shoppers       16        26          49            9
Deli shoppers      13        29          50            8
Bakery shoppers    24        30          40            6
Make shopping list
All shoppers       68%       13%         12%           7%
Deli shoppers      69        19           8            4
Bakery shoppers    70        14           9            7
Look over coupons
All shoppers       65        16          11            8
Deli shoppers      66        17          12            5
Bakery shoppers    66        15          11            8
Read newspaper ads
All shoppers       58        15          14           13
Deli shoppers      57        18          15           10
Bakery shoppers    54        17          18           11
Read ad circulars
All shoppers       63        14          13           10
Deli shoppers      62        16          14            8
Bakery shoppers    59        18          16            7

Morning shopping, particularly on Saturday, dominates among all shoppers, including deli and bakery customers. However, foodservice shoppers who are employed full-time are somewhat more likely to shop in the evening and during the week. Among these customers, prepared foods, both hot and cold, are likely to be big sellers.


If foodservice shoppers are looking for convenience and easy in-and-out, they are apparently finding it in supers. Both deli and bakery customers are likely to spend a little less time in the store than the typical shopper. This may be because many of them are coming in just for prepared items and other ready-to-heat or ready-to-eat products, rather than shopping the whole store. Traditionally, foodservice shoppers who do their full grocery trip, including stops at the deli and bakery, tend to spend more time in the store than other shoppers.

Shorter stay in supers

Length of average shopping trip
All shoppers       49.0 minutes
Deli shoppers      47.7 minutes
Bakery shoppers    46.5 minutes

RELATED ARTICLE: Source of shopper research

The Custom Services Division of the NPD Group Inc. has a national reputation in the research field. Its HTI Consumer Panel consists of approximately 250,000 households throughout the United States and is quota-controlled to match U.S. Census data. Participants in the Progressive Grocer NPD Study are drawn from a panel of 500 households. Households surveyed contain an average of 2.6 people and have an average income of $34.098.

RELATED ARTICLE: Saturday's the day
Day of major    % of all   % of deli    % of bakery
shopping trip   shoppers   shoppers      shoppers
Sunday            13%        14%           11%
Monday            13         10            11
Tuesday            8          7             5
Wednesday         12         14             8
Thursday          14         17            20
Friday            15         13            18
Saturday          25         25            27
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Title Annotation:Deli/Bakery Shopper Update '95
Author:Donegan, Priscilla
Publication:Progressive Grocer
Date:Aug 1, 1995
Previous Article:Working the middle ground.
Next Article:Will category management kill the supermarket?

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