Fresh perimeter departments are driving supermarket growth, according to a new study.
Fresh seafood tallied 5% instore dollar sales growth, deli 4.9% growth and bakery 4.2% growth, according to the latest Nielsen data.
That compares to just 1.7% growth for frozen, 1.5% for health and beauty and .6% for dairy.
“Fresh is the last stronghold for brick-and-mortar,” according to Nielsen. “Retailers that want to win across the store need to focus on fresh.”
Despite the explosion in online shopping in the U.S., physical stores haven’t gone by the wayside, according to the study. And fresh is the main reason why.
Although e-commerce represents just 4% of grocery sales today, it accounts for nearly one-third of total growth. And Americans are increasingly heading online to shop for nonperishables, household items and pet products, making the concept of stock up grocery trips a thing of the past for many shoppers.
Yet the fresh departments (bakery, deli, meat, produce and seafood) still lure people into physical stores, according to the study.
“In fact, online grocery shoppers spend 1.5% more in-store on fresh food than the average consumer does. As more category sales continue to shift online, retailers need a way to differentiate themselves in stores, and fresh is the perfect place to do it. Fresh is the growth engine of the store, as gains in these perimeter departments translate to total store success.”
Nielsen segmented stores based on the percentage of overall store sales from their fresh food departments, and top performers generate 43% of overall sales from perishable foods (compared to an average of 32% for the same measurement across all retailers).
For the most successful retailers, deli and produce departments provide the greatest contribution to total perishable sales. “This debunks the long-standing belief that the meat department contributes the highest impact to the success of the perimeter of the store. And it likely reflects consumers’ changing wellness needs, as well as their growing demands for convenience.”