Progressive Grocer - March 2009 - (Page 82)

Fresh Food 2009 Seafood Operations Review Rough Seas Aggressive retailers that prioritize seafood reel in healthy turns, but shrink, sourcing and competition continue as foremost challenges. sales for 2008, nearly two full points below the escalating seafood Consumer Price Index (CPI), which rose 6 percent in 2008. As such, many retailers were reluctant to raise prices to close the CPI gap, instead opting to absorb the costs in their margins. However, given that a grocer’s commitment — or lack thereof — to yielding strong seafood sales is in many cases a self-fulfilling prophecy, added price pressures placed atop the requisite highshrink/labor-intensive nature of the category make it that much more difficult for operators that view seafood as an afterthought vs. a signature category. What’s more, the ongoing controversy surrounding sustainability, mercury, pesticides and/or chemical levels By Debra Chanil and Meg Major n spite of an increasingly health-conscious base of consumers on the prowl for more nutritionally sound, low-calorie meal options, the prolonged stormy economic backdrop finds many retail seafood departments treading furiously to increase sales, according to findings of exclusive research compiled in Progressive Grocer’s 2009 Annual Seafood Operations Review. On the other hand, aggressive retailers that prioritize and position seafood as a critical destination category, with full-service presentations and well-trained staff, are harvesting profitable rewards and building highly 82 • Progressive Grocer • March 2009 I loyal customers in the process, which is also among the key highlights of our annual “state of the seafood case.” The study, based on the direct input of senior meat and seafood officials from around the country, polled a diverse cross section of retail participants about a variety of store-level issues, including performance and demand trends, comparable-sales and profitability ratios, operational and labor issues, and critical supplier-related issues. As revealed on the adjacent charts, the 36 percent tally of respondents reporting increased sales during 2008 represents a significantly smaller comparable figure vs. last year’s findings. Not surprisingly, the level of retail seafood survey participants who reported sales decreases widened to 27 percent, as did the 36 percent who reported seafood sales unchanged from the previous year. All told, supermarket seafood executives participating in this year’s annual study anticipated a net 4.2 percent increase in overall department Seafood Department Operations Seafood department share of supermarket sales Total industry seafood department sales Seafood department gross margin 2.7% $10.8 billion 29.1% Change in seafood department profits: Profits are up 27.4% Profits are down Unchanged % of store with full-service seafood cases Source: Progressive Grocer Market Research, 2009 24.8% 47.8% 38.2% 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 - March 2009

Progressive Grocer - March 2009
Contents
Front End: Ahold Banners Launch 'Major Consumer Wellness Initiative'
Nielsen's Shelf Stoppers/Spotlight: Frozen Foods/One-Food Oriental Entrees
Market Snapshot: Miami-Ft. Lauderdale, Fla.
Independents Report: The New Agenda at FMI - And in Washington
Lempert Report: What Shoppers Will Demand in 2009
Wake-Up Call: Back to the Future
Progressive Views: Looking Forward
Frozen & Refrigerated Trends: Staying Cool
Store of the Month: Straub's Newest Family Member
FutureView Introduction: Great Expectations
Futureview: Magnetic Core
Honey: Sweet Sensation
Organic/Natural Cereal: The New Face of Breakfast Sales
FutureView: Home-Cooked Homecoming
2009 Meat Operations Review: Solid Ground
2009 Seafood Operations Review: Rough Seas
Pharmacy: A Destination for Health
Technology FutureView: Retail 3.0
Equipment FutureView: Sustainable Differentiation
What's Next: Editors' Picks for Innovative Products

Progressive Grocer - March 2009