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What's in Store: Staying alive

Retailers up the ante on value-added product mix

By Christine Blank
January 05, 2012

In December, the three-store Dorothy Lane Market in Dayton, Ohio, expanded the fresh seafood case and grill at the gourmet retailer’s Centerville, Ohio, store. DLM executives put in a new seafood case with around 20 percent more variety, and added a Jack’s Grill station between the meat and seafood departments. The Grill, already in place at DLM’s two other stores, offers grilling of shoppers’ meat and seafood purchases and a lunch menu with specials such as grilled tilapia sandwiches.

Notably, DLM’s fresh seafood expansion is taking place during a shaky global economic climate. Although shoppers are feeling the economic pinch, executives with DLM and other retailers tell SeaFood Business that they are adding variety to their seafood departments and increasing their marketing efforts in 2012. The top retail seafood trends show that consumers are buying seafood but are often choosing less expensive species, purchasing smaller portions and seeking out value-added items.

“People are continuing to buy fresh seafood, but are watching their portion sizes. For example, swordfish and tuna do very well; we are just selling smaller portions,” says Jack Gridley, DLM’s meat and seafood director.

Other retailers are increasing the variety of seafood they carry despite increased wholesale seafood prices over the past year. Between 2008 and 2011, the number of unique items in supermarket seafood departments increased 3.8 percent to 137 unique items per store. Meanwhile, the number of value-added seafood products increased more than 10 percent in supermarkets in 2011, according to the Chicago-based Perishables Group. Sales of many value-added items are rising across the fresh departments, despite their higher price points, compared to traditional offerings, according to a statement from the Perishables Group.

“I think you are going to see more and more value-added items — including crab cakes, fish cakes and salmon burgers — and selling fish portions ‘by the each’ for value,” says Tom DeMott, executive VP and COO of San Ramon, Calif.-based Encore Associates, a strategic advisory firm.

One example is Winn-Dixie Stores of Jacksonville, Fla., a chain of more than 480 stores, which is expanding both its fresh and value-added seafood programs. After the recent multi-million dollar renovation of one of its Miami stores (which Winn-Dixie referred to as its seventh “transformational” location), the chain’s renewed focus on selling seafood was apparent. The revamped store’s meat and seafood departments were both expanded and fresh seafood is displayed on ice in European-style cases.

In addition, a sushi chef now prepares sushi in the seafood department. In the store’s new deli/ restaurant area, experienced chefs prepare fresh fish in addition to chicken wings, barbecue foods and made-to-order pizza and pasta.

“Our seafood manager and staff in store — like the neighborhood butcher — offers guests the culinary expertise to purchase and prepare seafood. This continues to be a differentiator for our business,” says Eric Barnes, a Winn-Dixie spokesperson.

Another retailer working on variety, including selling more prepared seafood items in its fresh seafood case and deli case, is Casey’s Market in Western Springs, Ill. The single-unit store also samples seafood regularly and relies on the “fantastic smells” coming from the deli when employees are cooking seafood items, says store manager Joe Lane. Casey’s carries three marinated fish SKUs regularly, along with Spinach and Feta Stuffed Salmon, Crabmeat Stuffed Tilapia and other value-added items. “We do the inexpensive fillets [in the prepared section] to keep them moving,” says Lane.

Still, the retailer focuses on merchandising its popular staple items, including tilapia, (typically priced under $10 a pound), walleye, whitefish and both farmed and wild salmon.

“We have got to be a lot more price conscious, but we try not to charge more,” says Lane.

The retailer also boosts seafood sales by running specials and sending a weekly e-newsletter to its shoppers. “Because we are mainly a butcher shop, we try to put seafood on sale more often than meat. Otherwise, [shoppers] might not notice the seafood case,” says Lane.

Browne Trading Co., an upscale seafood retailer and wholesaler in Portland, Maine, is also boosting sales by improving its online marketing. In 2011, the company revamped its website to be more visually appealing to its traditional, baby boomer mail-order customers and new foodie shoppers that skew younger, says Browne Trading’s marketing director Nick Branchina.

“We have traditionally had an older audience. In the last five years, it is the younger to middle-aged customer. The technology needs to keep up with that audience,” says Branchina.

In addition, Browne Trading added product-specific digital newsletters, put its glossy print catalog online (and still mails it to clients), and now has a Facebook presence.

“We are trying to connect with customers in more ways than we had in the past. We are also trying to give the retail customer — the home chef — information about making buying decisions online,” says Branchina.

While seafood retailers are conscious that 2012 will likely be challenging economically for their customers, they are diversifying their seafood offerings and improving their marketing strategies to compete more effectively in the global marketplace.

 

Contributing Editor Christine Blank lives in Lake Mary, Fla.

January 2012 - SeaFood Business 

 

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