Italian Mass Market retail Italian, master of freshly served counter, forced to rethink the offer

Fresh products continue to drive sales, especially in the discount format. Since the beginning of the year, however, consumer habits have definitely changed and in this article, we are going to define in detail this evolution, including some suggestions.

Understanding the sales data of large retailers must allow the manufacturing industry to find solutions in line with the trends of the moment and to propose them to large retailers, while the latter must quickly update its layouts trying to intercept the new trends as much as possible.

There are numerous segments that compared to 2019, in an analysis determined on the basis of the progressive data (September 2020 to current network in all formats), are in sharp decline, but more than loss of turnover we can speak of partial migration of turnover.

Generally speaking, a certain resistance of the consumer towards the purchase of over-the-counter products will be noticed and this implies a rethinking, perhaps circumstantial, but necessary. This must be based on the experiences of those who, even abroad, have been able to create extraordinary offers of fresh, free-service product assortments, and perhaps, unfortunately, for the moment our undisputed quality in the construction of over-the-counter product offers, which distinguish us in the world, is slowing down.

Let’s see in detail: in the month of September, the bread and bakery department served on the counter lost -7.3% of sales compared to the previous year, achieving a minimal recovery in sales of the assortment at the imposed weight (+1.1%). In truth, if we consider that the loss of bread and bakery products served at the counter was -11.4%, the turnover recovered from sales at imposed weight, which increased by +13.3%.

Even more striking is what happened in the segment of cold cuts: in the variable weight segment, therefore, in the variable weight sales, cold cuts and whole products lost -3.2% in the month of September, and the progressive figure indicates a -1%. On the other hand, sales by imposed weight, therefore inside the refrigerated counters, have increased by +9.6%.

Be careful: the sales of the variable weight in cold cuts as in bakery products are much higher in the variable weight than in the imposed weight, therefore such a significant recovery of the latter is not said to be able to compensate the losses in absolute value.

The year 2020 is the year of sales of fresh products at imposed weight, so those of refrigerated counters, veal and beef increased sales by 26.8%, cubes and slices by 22.2%, poultry meat by 9.7%, pasta 15.1 % and all these increases find two solid reasons.

The first is the consumer’s propensity to products not touched by people, in a period where social distancing must be the rule.

The second is a problem linked to sales by format: the growth of discount stores, solid, continuous, and winning, finds a strong driver in the fresh products that, however, are in sharp prevalence at the imposed weight.

The retailer must become aware of this fact and support these choices: increase areas with fresh products on offer. An interesting theme is that of products in ATMs, i.e. products served from the counter but packaged in-store. The challenge for the traditional retailer is to gain confidence in that type of offer in order to compensate for lower counter sales revenues and try to optimize its (huge) costs.

The industry must be proactive: the offer of products in cross-docking to deepen the offer of the retailer without occupying picking places, widening the offer in terms of extension of the category not so much in terms of width but more in terms of depth, for example by deepening the offer with different weights. In the Netherlands, Albert Heijn has set the school on these concepts, which today are useful in the period of coronavirus also for us Italians, masters of the choreography of the serving counters.