Progressive Grocer Product

Summer 2016

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PERISHABLES • Create stronger emotional connections with customers • Create dominant franchise and diferentiate from competitors • Gain bargaining power with suppliers There is not, however, a one-size-fts all approach to prepared foods at retail. Overall, the perimeter provides great opportunity to diferentiate. Within prepared foods, specifcally, IRI points to four main retailer concepts, usually mixed and matched to tailor to the needs of the specifc store/market. Options are: • Sit Down Restaurant • Sophisticated Stations • Easy Meals • Limited Oferings The perimeter has a lot of power to make an impact for retailers. Managed well in consideration of a specifc market's – or even a specifc store's – shoppers, the perimeter can build loyalty, community within a community and revenue. Research points to some key behaviors to win at retail in the perimeter. According to IRI: • Invest to understand current and potential shoppers at the store level and customize oferings against each unique opportunity • Invest in talent acquisition, development and retention • Manage costs efectively • Create a superior and unique customer experience Further, IRI reports a continued bright future for fresh prepared foods. The market should support continued momentum, outpacing the growth in the rest of the store. Accelerated separation of high performers, continued refnement in concept sophistication, and expansion of fresh prepared even in small format stores. Merchandising Matters According to Chicago's Market Track, the fast growth in perishables is notable and thus drives its fair share of promotion and merchandising eforts. With a focused approach on branded perishables (not per-pound products), the frm notes that branded perishables have received 28 percent of total perishables circular promotions over the past 12 months, a slight uptick from 27 percent the previous 12 months. Overall, total perishables circular promotions decreased by less than 1 percent over the past 12 months vs. the prior 12 months. According to Market Track, this translates to the category maintaining the same levels of print promotional support despite grocers running fewer total print promotions across all categories. PGPS Fresh/prepared is the fastest-growing perimeter department: Annual sales topped $10.8 billion in 2015, an increase of 9.8% vs. the prior year Source: IRI FreshLook data, MULO 52 weeks ended Nov. 29, 2015

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