Progressive Grocer

DEC 2015

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Get to the right place. At the right pace. Tyson Deli / Bakery. Several emerging trends fueling this trajectory. Fried chicken growth is being driven by the eight-piece package as part of a total meal solution staple. Chicken meals are also growing faster than the total category. But Tyson Foods cautions there may continue to be wing supply issues for the overall industry over the next year, which could have a negative effect on wing growth for 2016. According to SpenDifference, a restaurant supply chain co-op, consumers, restaurants and large grocery stores prefer smaller wing sizes, but the supply of mid-sized birds is shrinking because farmers are increasingly raising larger birds. The overall economy is one of the biggest influencers in factoring growth projections for 2016. In October, Washington, D.C. – based business forecaster Kiplinger reported that strong consumer spending is playing a big role in fueling the economic resurgence, helped by strong gains in disposable income and lower gasoline prices. Thanks to months of solid gains, Kiplinger stated, retailers are poised for healthy sales growth as they prepare to enter a new year. A 2015 CREST report reinforces this prediction, stating that a strengthened economy will continue to fuel growth in foodservice spending in the months ahead. The U.S. Department of Agriculture's Economic Research Service (ERS) has also issued reassuring predictions, stating that 2016 supermarket prices should remain in line with the historical average of inflation. They are expected to rise 2-3% pending normal weather conditions. While the ongoing drought in California could have large and lasting effects on fruit, vegetable, dairy, and egg prices, conversely, if oil prices continue to remain low throughout 2016, the ERS predicts subsequent decreases in production and transportation costs may be passed on to the retail level. While CREST reports dollars are up and forecasts overall shopper spending may continue to rise, Tyson Foods expects that the number of shopper trips to the deli will remain steady, but the amount consumers spend each time they shop will increase in 2016. It is this trend in "trading up," or consumers spending more per visit in restaurant foodservice, that deli retailers should focus on as they develop their 2016 production and sales strategies. ©2015 Tyson Foods, Inc. Tyson is a registered trademark of Tyson Foods, Inc.

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