MADISON, WIS. – Food retailers beset by overwhelming demand due to pandemic panic buying have seen higher sales across departments. But the deli segment has seen mixed results with higher sales for meat and cheese and lower sales for prepared items, the International Dairy Deli Bakery Association (IDDBA), 210 Analytics and IRI, said in a new report.
Deli departments experienced year-over-year sales increases for cheese and meat, but deep declines for deli-prepared items as the pandemic prompted many stores to close or limit operations at made-to-order counters, self-serve buffets, salad bars and hot bars, the report said. Sales of deli cheese and meat had double-digit increases the week ended March 15, whereas sales of deli prepared items quickly began to flatten out and decline in subsequent weeks.
“Sales were likely influenced by the earlier Easter and a higher everyday demand that is driving a new baseline that sits well above the old normal,” said Jeremy Johnson, vice president of education for IDDBA. “At the same time, sales results must be seen against the backdrop of many stores having shortened opening hours, closed service departments, metered entry of shoppers, purchase limitations on popular items and continued out-of-stocks for others.
“These measures are affecting deli prepared sales in particular. The question is which of the short-term behaviors during the pandemic will become more permanent, and we will continue to track purchasing trends.”
Sales in the deli-prepared category decreased a little over 37% compared with the same week in 2019, the report said. Sales were off for virtually all offerings and meal occasions, from breakfast items to deli pizza.
“As the first waves of panic buying are over, measures to curb the number of people going in grocery stores combined with a slowdown in trip frequency is really hurting the deli prepared area,” said Eric Richard, industry relations coordinator with IDDBA. “The only areas that experienced growth were holiday meals with some retailers offering heat-and-eat Easter meal solutions.”
In the deli meat category, sales are disproportionately concentrated in packaged meats, IDDBA said. Both volume and dollars for pre-packaged deli meat advanced significantly more than that of random weight deli meat which increased 6.2% in dollars over the week of April 5, with volume sales up 1.5%. Deli meat sales peaked three weeks prior, at approximately 40.5%.
“Over the past few weeks, many retailers have closed cut-to-order counters and instead are providing pre-packaged inventory for easy grab-and-go, but still in random weight,” the report said. “Shoppers commented on the importance of finding a way to provide both package size variety and the ability to customize even with the cut-to-order stations closed. Some retailers have ramped up their online meat/cheese deli ordering system to provide customization without the in-store interaction.”