Nielsen: Is the fresh department the 'last stronghold for brick-and-mortar'?

By Mary Ellen Shoup contact

- Last updated on GMT

 ©GettyImages / Noel Hendrickson
©GettyImages / Noel Hendrickson

Related tags: Nielsen, fresh food, produce, Plant-based foods

As more category sales continue to shift online, the fresh department remains a strong source of foot traffic for brick-and-mortar retailers and will serve as a key way to lure more consumers into stores, says Nielsen in a new report.

"Fresh is the last stronghold for brick-and-mortar. Retailers that want to win across the store need to focus on fresh,"​ noted Nielsen in its latest report​. 

Americans are increasingly heading online to shop for non-perishables, household items and pet products, making the concept of 'stock up' grocery trips a thing of the past for many shoppers, said Nielsen. E-commerce represents just 4% of grocery sales today, but accounts for nearly one-third of total growth. 

When it comes to purchasing fresh, perishable items from fruit, vegetables, and herbs to plant-based and animal proteins, the in-store, physical experience remains consumers' preferred shopping method, according to Nielsen. 

"Fresh is the growth engine of the store, as gains in these perimeter departments translate to total store success. Retailers with well-established fresh departments provide us with a glimpse into the future, and a roadmap for others."

What makes a standout fresh department?

"For fresh retailers, it’s about consumers craving a destination, not for stocking up. Experience, personalization and convenience win,"​ said Nielsen.

Nielsen analyzed brick-and-mortar retailers based on overall store sales from their fresh food departments and found that the top performers generate 43% of overall sales from perishable foods (compared to an average of 32% for the same measurement across all retailers). Nielsen also found that among the most successful retailers, deli and produce departments provide the greatest contribution to total perishable sales.

According to Nielsen, this trend towards increased spending at the deli and produce departments "likely reflects consumers’ changing wellness needs, as well as their growing demands for convenience. With more than three-fourths of deli sales coming from random weight items, top fresh retailers have honed a more authentic, ready-made feel."

Within bakery, retailers are winning by pulling in consumers in for everyday items (e.g. breads and rolls) rather than just special occasion items such as cakes and pastries. 

"Too many stores only focus on the sweets portion of their bakery, missing out on the opportunity to bring consumers in on a daily basis for breads and rolls," ​said Nielsen. 

FreshDepartmentSales_Nielsen

Consumers still require tactile feel for avocados, tomatoes, apples, herbs, and berries

When it comes to purchasing fresh, perishable items, having the tactile experience of shopping in the produce department is still very valuable to consumers, according to Nielsen. 

"Leading fresh retailers understand this, significantly outperforming lesser performers in avocados, tomatoes, apples, herbs and berries. These produce items in particular are ones where consumers look or feel to confirm freshness,"​ noted Nielsen.

Across all US retailers, avocado sales are up 8%, and vegetables are succeeding even more than fruit (up 4.9% in sales vs. a slight increase of 0.3% in sales for fruit). As a result, investing in a stronger vegetable supply chain is a smart business strategy, said Nielsen.

Top fresh departments feature 3x as many plant-based meat alternatives

'Next level' fresh departments also know the importance of stocking the right variety of items for shoppers who are increasingly seeking health-conscious and convenient food options.

Top performing fresh retailers have responded by featuring nearly three times as many different plant-based meat alternative offerings as lesser performers—a savvy move, considering nearly 60% of US consumers value dietary balance between plant-based and animal-based foods, said Nielsen.

Nielsen added that "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."

Related news

Show more

Related products

show more

Product Recovery (Pigging) for Food Manufacturers

Product Recovery (Pigging) for Food Manufacturers

HPS Product Recovery Solutions | 25-Nov-2019 | Technical / White Paper

Sanitary product recovery ("pigging") is in wide use by food manufacturers that pump liquids or wet products.
It gives a high ROI and...

Celery Juice and the Health-Conscious Consumer

Celery Juice and the Health-Conscious Consumer

Florida Food Products | 25-Oct-2019 | Technical / White Paper

Celery juice is an on-trend beverage ingredient with sought-after health benefits. Given its popularity, it’s no surprise that celery juice is showing...

Create plant-based products that consumers prefer

Create plant-based products that consumers prefer

Archer Daniels Midland Company | 21-Oct-2019 | Technical / White Paper

It takes more than just knowing what protein options exist to create irresistible, consumer-preferred foods. As products starring plant-based proteins...

Related suppliers

Follow us

Featured Events

View more

Products

View more

Webinars