Progressive Grocer - October 2009 - (Page FF6)

FROZEN/REFRIGERATED is probably recession-driven, given the current competition for price-shopping consumers. Local and national economic conditions understandably rose to third place in the 2009 survey, up from sixth place last year. Competition from other supermarkets also increased from seventh place to fourth in 2009. Maintaining good variety/selection ranked fifth in 2009, up from eighth place last year. The draw of supercenters during the recession is seen in a higher ranking for non-supermarket Frozen Foods Census competition as a problem in 2009, up four places to ninth this year. In comparison to recession-related problems, product cost is apparently not the issue it was in 2008; its ranking dropped from second place last year to sixth this year. Equipment costs also ranked lower, dropping from third place to seventh in 2009. Recruiting effective employees ranked eighth in 2009, down from fifth last year. Concern about product quality dropped two positions in the current ranking to 13. Customer satisfaction and labor costs each dropped one place to 10th and 11th places, respectively. Food safety and shrink/waste had no change in ranking from last year. Fewer frozen food managers are resorting to raising retail prices to offset margin loss, according to the 2009 survey. “Retails are being forced down by competition,” one exec says.While the percent of respondents who said they’re raising prices dropped sharply this year, those who said they’re holding the line on prices and eating the margin rose. Adding frozen products to meet customer needs is desirable but difficult in already overcrowded cases. “With space limitations, [adding prod- ucts] is a difficult balancing act,” one grocer notes. Health and wellness (at 70 percent) remains the top area cited for addition of new products to answer consumer concerns. Single/smaller portion sizes, whole grains and budget dinners increased in mention this year. Frozen foods executives were given the opportunity to make a vendor “wish list” and detail how vendors might provide better service. Comments included several requests for more frequent visits from vendor reps, more knowledgeable employees, more frequent deliveries, more new items, more selection, more specials and better efforts at cutting costs. ■ Total Industry Frozen Foods Department Sales Change From Previous Year Frozen Foods Dept. Share of Supermarket Sales Average Weekly Sales per Store Average Annual Sales per Store SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 $36.1 Billion 3.1% 6.5% $19,614 $1,019,947 Reaction to Rising Costs Raising Retail Prices to Offset Margin Loss Running More Specials Holding the Line on Prices and Eating the Margin Changing Vendors SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 56.7% 40.0 26.7 20.0 Frozen Foods Department Performance Average Frozen Foods Gross Margin Frozen Foods Department Labor as a % of Sales Number of Frozen Foods Employees: Full-time Part-time Total Full-time Equivalents Frozen Foods Department Shrink as a % of Sales Number of Frozen Foods SKUs per Store Frozen Foods Department Linear Feet Number of Freezer Doors per Store Number of Freezer Cases per Store Change in Frozen Foods Department Profits in Past Year: Profits Are Up Profits Are Down Profits Are Unchanged SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 31.4% 5.6% Seeking New Products to Address Consumer Concerns Health and Wellness Budget Dinners 70.4% 55.6 51.9 33.3 22.2 18.5 1.1 2.1 2.2 1.6 2,146 218 44.4 5.8 52.8% 22.2% 25.0% Respondents cited in PROGRESSIVE GROCER’S second annual Frozen Foods Operations Review comprised 32 percent of supermarket operators headquartered in the Midwest, 27 percent from the Northeast, 23 percent from the South, and 18 percent from the West. Fifty-six percent represent companies operating one to 10 stores, while 44 percent operate 11 or more stores. These respondents operate an average of 51.1 units. All respondents have some level of authority over the frozen foods category at their company. Single/Smaller Portion Size Whole Grains Lower Sodium Indulgent Products SOURCE: PROGRESSIVE GROCER MARKET RESEARCH, 2009 Methodology • 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