Fresh food is keeping brick-and-mortar stores open, according to a report from Nielsen.
Online grocery shoppers spend 1.5% more in-store on fresh food than the average consumer does, notes an article from Nielsen regarding the report. “Fresh is the growth engine of the store,” the article says, “as gains in these perimeter departments translate to total store success.”
After segmenting stores based on the percentage of overall store sales from their fresh food departments, Nielsen found that top performers generate 43% of overall sales from perishable foods—compared to an average of 32% across all retailers. Deli and produce departments provide the greatest contribution to total perishable sales, reflecting consumers’ changing wellness needs and growing demands for convenience.
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The article notes that health and beauty care is shifting online; the dairy department is struggling. “So while the latter departments still have strong in-store value, investment in fresh should take priority.”
Not all fresh is created equal, the article adds: Top performing fresh retailers feature nearly three times as many different plant-based meat alternative offerings as lesser performers. Top performers are also investing in a strong supply chain for fresh fruits and vegetables: “Leading fresh retailers significantly outperform lesser performers in avocados, tomatoes, apples, herbs and berries. These produce items in particular are ones where consumers look or feel to confirm freshness.”
And, of course: There’s the experience of being in a store, which shoppers crave. “It’s about consumers craving a destination, not stocking up,” the article reports. Stores doing well in the bakery department are churning out breads and rolls, which bring people in on a daily basis; they focus on personalization and convenience to keep customers happy. Fresh is where brick-and-mortar shines, so, retailers—invest in it.
Jay Jacobowitz, president and founder of Retail Insights and co-author of WholeFoods‘ yearly Retailer Survey, spoke to us about these results. “The WholeFoods Magazine retailer survey a decade ago innovated by correctly identifying fresh perishables as the critical variable that drives greater food-store sales. We are gratified to see Nielsen highlighting the perishables percentage-of-sales in their analysis of industry sales results.” The 2019 Retailer Survey, which has for 10 years separated retailers by amount of fresh produce sold, is available here.