Progressive Grocer - October 2009 - (Page FF14)

FROZEN/REFRIGERATED standable, given the high egg prices and drop in milk consumption. While over one-half (54.1 percent) thought sales would increase in last year’s survey, only 39.6 percent thought so this year. The percentage of respondents expecting a decrease in sales more than doubled, from 12.6 percent last year to 28.2 percent currently. Almost one-third (32.2 percent) said sales would stay the same, a dramatic increase over last year’s survey (12.6 percent). Sales for dairy departments at supermarkets in 2008 Most Profitable Dairy Items Cheese Refrigerated Juices Yogurt Milk Eggs SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 36.4% 17.6 12.1 10.2 8.6 Problems Facing Dairy Department Local/National Economic Conditions Profits Product Costs Other Supermarket Competition Finding Space for New Products Recruiting Effective Employees Non-Supermarket Competition Maintaining Good Variety/Selection Shrink/Waste Labor Costs Equipment Costs Customer Satisfaction Food Safety Product Quality Levels PROBLEMS RATED ON A SCALE OF 1-10, WHERE 10=MOST SERIOUS SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 7.52 7.27 7.18 7.14 6.82 6.66 6.32 6.28 6.21 6.11 5.98 5.74 5.66 5.58 were $53 billion, a 2.8 percent increase from 2007, Fastest-Growing Dairy Items driven in part by a 1.2 percent growth in total industry store count.The dairy department’s share of supermarYogurt 72.9% ket sales is 9.8 percent, the same as last year. Weekly Cheese 54.1 sales per store averaged $28,796 in 2008, up 1.5 percent from 2007. Average annual sales per store were Milk 52.9 $1,497,429. Refrigerated Juices 38.3 Average gross margin reported by grocers in the current study was 26.9 percent, down slightly from last Cottage Cheese/Sour Cream 21.3 year (27.5 percent). There was movement since last Eggs 17.9 year in the question asking if dairy department profits had changed in the past year. The percentage saying Margarine/Butter 15.8 profits are up declined from 41.7 percent last year to Refrigerated Pudding/Dessert 9.0 31.3 percent in this survey.The largest area of change was in the percentage saying profits were unchanged, Spreads/Dips 7.9 which rose from 29.2 percent in the last survey to 43.8 Refrigerated Dough 3.9 percent this year. There was a small drop in the percentage that said profits are down, with 25 percent in SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 the current survey compared with 29.2 percent in the grabbed first place again, as it did last year. Cheese previous study. In the 2009 survey, respondents reported labor as was second, milk third and refrigerated juices fourth 7.2 percent of sales, almost the same as in last year’s sur- in both surveys. The middle of the product lineup vey (7.1 percent). On average, respondents reported is where minor shifting of places occurred this year. 1.4 full-time department employees and two part- Cottage cheese/sour cream ranked fifth this year, up from sixth in the last survey. Eggs, a volatile cattime, for a total of 2.4 full-time equivalents. The average dairy department merchandises 140 lin- egory, dropped from fifth to sixth place. ear feet, up from 130 last year. SKU counts decreased Margarine/butter dropped from sixth to seventh 2.2 percent in the past year from 1,892 to 1,850, pos- place. The categories of refrigerated sibly due to some department consolidation of products. pudding/desserts, spreads/dips and refrigerated dough held on to As a percentage of eighth, ninth and sales, shrink was flat Usage of Category Management in Dairy 10th place, respecat 2.3 percent comtively, in both surpared with 2.4 perveys. cent in the previous When dairy study. No executives were Category manasked which cateagement appears to Yes gories were most be a crucial merprofitable, cheese chandising tool in held on to the top the dairy departposition. Refrigerated ment, with 60.3 perjuices ranked second cent of respondents as in the last survey, saying they use this SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 while yogurt method. Comments in this area included:“We utilize actual scan information dropped to third from second last year. Milk and eggs from the stores, from our own in-house system and traded places on the most profitable list this year, with IRI info”;“Category management has been effective”; milk taking over fourth place and eggs dropping to fifth place. and “Tracking is helpful in not over-ordering.” The most popular dairy foods with consumers, The Case is the Place according to 2009 survey results, are yogurt (up one Respondents in the 2009 survey ranked a list of to first place), milk (down one to second place) and the top dairy categories according to growth.Yogurt cheese, which held onto third place. These changes 39.7% 60.3% • Progressive Grocer • October 2009 A H E A D O F W H AT ’ S N E X T www.progressivegrocer.com http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - October 2009

Progressive Grocer - October 2009