Perishables Sales Booming At Retail

Shopping/meat section

After a year of steadily shaking up consumer habits in the supermarket, the recession has produced some clear winners -- and new research from Nielsen shows that most of them are on the edges of your local grocery store.

Stores' perishable departments -- the bakery, fresh meat, deli and produce that line the perimeter -- are becoming more productive as consumers become used to eating out less, and focus more intently on the quality of the meals they prepare at home, says Jeff Gregori, VP of Nielsen's solution consulting, based in New Jersey.

With 46% of consumers saying that their families eat out less often, value-priced meals at retail are posting double-digit increases, he reports. "This 'return to the home' has been a common theme, and we've heard it a lot in the last year. But with this research, what really surprised us was the movement of foods sold on the perimeter."



Among the many consumers who have cut down on dining out, there's been a much greater awareness of what's for dinner, he says. "They are spending about 6% more in supermarkets and supercenters as a result, Food Network viewership is going through the roof, and online food research is up dramatically." Smart retailers are taking advantage of this new what-to-serve anxiety, with chains like Meijer and Whole Foods Market offering food-planning content through iPhones.

But just because these shoppers are willing to pay extra for foods that are more convenient doesn't mean they aren't focused on getting them at a good price: Nielsen finds that 51% of meat and seafood is purchased when it's on sale, and 41% of shoppers notice those prices in store circulars. And while supercenters and warehouse clubs have made a concerted effort to beef up their perishables, supermarkets are still stronger, with a 70% market share of meat and seafood, and 50% of deli business.

Separately, Whole Foods released its fiscal fourth-quarter results, which exceeded many analysts' expectations. Comparable-store sales fell just 0.9% for the quarter compared to the same period a year ago, and sales for the quarter were actually up.

"We believe our sales have stabilized and officially turned the corner," the Austin, Texas-based company reported in its earnings release. "Our comparable store and identical store sales trends improved for the second quarter in a row and, after five quarters of year-over-year declines, so far in the first quarter are up 1.6% and 0.4%, respectively."

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