You may be asking what are the key factors in the decision to devote valuable shelf and floor space in a produce department? What does a professional merchandiser (produce tradesman) use in his decisions when positioning each of the many items now found in the average grocery store? What role does price play? What role do profits play? What role does advertised items play? Does the location influence shopping patterns? 

What principles drive space allocation in a fresh produce department? Merchandising for daily and weekly ads and other factors all require prioritization. Combining our own experience and asking a few other produce professionals, here is what we compiled:

Movement of product will change based on the devoted space. The rule of thumb is the wider the display the more the sales; the narrower the display the less the sales. An example: if there is one case of cantaloupes on the shelf versus if there are fifteen cases on the display deep and wide and spilling over. Movement in such a case multiplies sales per case per allotment. The math goes something like this – one case on the display generates one or two cases sold per day, 12 cases on the display generates 10-12 cases sold per day. Of course, there must be customer traffic through the store for this principle to play out. 

Multiple variations of one item like bell peppers need specialized segmentation. Bell Peppers typically are green, yellow, orange, and red. The tonnage movement on green leads the pack typically followed by reds. So, should the four colors have equal shelf space in four baskets or shelf trays? Unanimously everyone we interviewed said no and suggested two to three times as much space should be given to the green bells. Basically, 50% less should be devoted to the red bells assuming they are higher in price. It was suggested that the other colors should be about half the space allocation of the red bells.

Mike Roberts, director of produce for Harps Stores, Rogers, Arkansas, has a motto: “Sell more of what you’re already selling.” That makes perfect sense. The buying patterns of the shoppers tell you what’s important to them. Each store has a different mix of consumer demographics. When I was in college, we had two Family Mart grocery stores in town. I worked at both during my time in school. One was in a lower income, blue-collar neighborhood and the other in an upper income, primarily white-collar neighborhood. Our home office would send out a plan-o-gram telling us how to set the department. They had one foot of collard, one foot of mustard, one foot of turnip greens. They expected us to follow the plan they sent out, but we adapted because one store needed three feet of each based on demand and the other could put all three in one foot of space and still not sell them all before they turned yellow. Customers set the pace for space by telling you what they want more of or what they want less of by their purchase choices. 

Original department layouts prior to a store’s grand opening require a basic knowledge of movement based on demographics.  When managers review movement reports it is pretty easy for them to see what items move the most tonnage. So, when they set the original layout of the department, they spread out on the big volume movers and cut down on the slower movers. Then, after the store is past grand opening there is a continuous process of adjusting space daily and weekly. 

Other determining factors are ad items, holiday demand items, seasonal demand items, more profitable vs. less profitable, and image setting items. 

Image setting “spotlight” items can be set in line of sight. “If we get specialty items or new items that we want to assure the consumer sees, we place them in upright shelving at eye level,” said Roberts. 

Another shelf set consideration is the value-added fresh-cut veg and salad sections. Fresh cuts are typically higher margin items. Therefore, the shelf space is gladly given. Most of the time prepackaged value-added products are represented by supermarket merchandising brokers who typically lend a helping hand with the sets and provide prepared diagrams to guide the retailer in shelf space allocation. Does each retailer follow them to a tee? Not necessarily, as each retailer tweaks their set based on that store’s demographics. However, the diagram is still very helpful because it does help them start with a similar layout for uniformity.  

Do suppliers pay stores for shelf space? Not typically in fresh produce. There could be, however, manufacturer perks for taking on new items and or coupons to drive movement with items like salad dressings.  

Lou Malaponti, president and CEO of Perishable Pros, Kansas City, Missouri, says that “devoting out-of-department space in the form of secondary displays can achieve additional incremental sales.” As an example, Malaponti stated that “banana satellite units typically add one to three cases daily to the average store’s banana sales.” 

Malaponti feels that there are three main factors that drive the decisions on shelf allocation: “cost, profits, and seasonality.” Another example of out-of-department shelf space would be a secondary display of cabbage with corned beef during St. Patrick’s Day ads or portabella mushrooms in or near the meat case during a steak ad. 

Other seasonal tie-in display methods are marshmallows tied into the sweet potato displays during the Thanksgiving holiday promotions and guacamole mix tie-in in with avocados during Super Bowl week. 

High demand holiday items naturally require more devoted space. For instance, celery and cranberries at Thanksgiving, cider in the fall set, horseradish during Passover, caramel apples during Halloween ads, asparagus and strawberries during Easter ads, and melons and sweet corn during July 4th ads. 

These are key factors that go into the planning of valuable space allocation. It’s not a simple process but making many of these wise choices can make a major difference in the top-line and bottom-line of a retail grocer’s P&L.