2019 Retail Deli Review: When It Comes to Grocery Sales, Deli Continues to Deliver

Deli is flourishing at Oleson’s Food Stores’ four locations in and around Traverse City, Mich., for three reasons, according to Samantha Oleson, assistant director of bakery and deli: “The economy, which has an effect not only at a store level, but a community level, due to tourism; our assortment of products to meet our customers’ needs; and our customer service to continue serving our loyal customers.”

Oleson expects that success to continue. “The industry as a whole is able to keep up on up-and-coming food trends, health concerns, and ideas, and I think that will play a big role in the coming years,” she says. “The industry is always changing and growing; there are always opportunities.”

Total Meal Solutions

The need for convenient meal solutions is a key consumer motivator, and that’s being reflected in the supermarket deli.

The vast majority of survey respondents said that their prepared food programs are increasing both in dollar (78 percent) and unit (80 percent) sales. Additionally, nearly 70 percent of respondents said that they’re either “significantly” or “modestly” increasing the space devoted to prepared foods.

Voni Woods, VP of foodservice, Starbucks and sushi at Pittsburgh-based supermarket chain Giant Eagle, says that growth in the deli is all about convenience, or, as she puts it, “deli in a hurry” — ready-to-heat meals, meal kits, and grab-and-go sandwiches, salads and soups.

To be sure, the top areas that survey respondents said they’ll be concentrating on in deli/prepared foods during 2019 are sandwiches and bundled meals.

Further, nearly two-thirds said that they’re cross-merchandising their deli offerings to drive sales throughout the store.

“Since foodservice is highly perishable, we are mostly not cross-merchandising out of department, but rather bringing items into the area for a more solution-based approach,” Woods notes. “Cornbread by the chili, snacks by the in-department register, all kinds of kid and adult beverages, bread, crackers for cheese and soup, all the toppings for a great salad bar, desserts for one — and more when appropriate, like pumpkin pie with dinners, etc.”

Hot foods and ready-to-eat items are driving growth for Quincy, Ill.-based grocery chain Niemann Foods Inc. “These are home-cooked items made from recipes in store and taken home and warmed up by the customer,” explains Jim Brown, manager of Niemann’s store in Pittsfield, Ill.

Brown notes that he expects deli sales to continue on their current trend of outpacing his overall store sales by about 3 percent.

“Grocery is, of course, the easiest to cross-merchandise with deli items,” Brown acknowledges, adding that bakery items lend themselves well to pairings with deli meat and cheese.

“As the make-at-home items still seem to be going well, I can see our deli getting in this game,” he says. “Take home, mix together and cook for a small amount of time. This would make the customer feel they made the dish.

“Deli is a fun department, and it always seems to have a lot going on,” Brown continues. “Warm foods and take-home-to-go seem to be doing well in our area.”

For her part, Oleson says: “We love the opportunity to cross-merchandise. We see opportunities between all of the departments. Our bakery and deli go hand-in-hand, and we have many grocery items that fit in that mix as well. It is all about thinking about the recipes you make yourself, and if it works together, it is often shown together.”