Consumers also gained a greater appreciation for the value of quality prepared foods from the in-store deli during the pandemic. “Prepared foods are back because people are tired of cooking,” says Parker. “And they’re willing to pay more for quality and convenience.”
Many consumers improved their cooking skills during the pandemic, but they also know what they’re not able to cook, Parker says. As a result, shoppers continue to turn to the prepared foods counter for international cuisine such as Indian, Mediterranean and Asian dishes.
“They will purchase these foods from the deli because it’s still cheaper than ordering it at a restaurant or from DoorDash,” notes Parker. “Fresh foods are going to be the place where a retailer can meet these needs. So, yes, you need EDLP (everyday low prices) in heads of lettuce, chicken breasts and ground beef—you need to have those banner staples to be competitively priced—but you also need to recognize that consumers want variety and they want to trade up on some things in their basket.”
While dollar sales of certain items, including breakfast goods (14.9%), deli sandwiches (11%) and prepared meals (5.3%) were up for the 52 weeks ending July 11, 2021, Parker has her eye on total deli/prepared sales, which are up just 9% compared with 2019.
“What that says to me, and I know this from our velocity data, is that we’ve not returned to engagement with deli/prepared at the level we did pre-pandemic,” she says. “Certain things are up over two and three years ago—sandwiches, entrees, breakfast foods. I think that speaks to meal fatigue and that speaks to delis coming out of this pandemic a little more diverse and solution-oriented than before the pandemic.”
Parker’s concerned that if deli/prepared continues to offer the same old, same old, it will miss out on the tremendous sales opportunities in the next phase of the pandemic.
“People are seeking different cuisines and healthier food, but I would argue that there isn’t enough variety, flavor and health in most delis today. These trends in deli/prepared could be up even more if we looked at things that are up in, for example, the meat department and frozen entrees.
“One of the things that’s the most telling take away from deli in 2021 is that deli/prepared meat is down versus two years ago and three years ago, because even though we’re meal-fatigued we’re not so sure that jumping back to rotisserie chicken—which dominates the majority of most prepared meat cases—is what we want anymore,” she continues. “We know how to make our own chicken. It’s not that hard. So why are we still giving them rotisserie chickens? We’re missing the mark on the kinds of prepared and step-saver meats consumers really want today.”