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What's in Store: Tried and true

Retailers concentrate on value, convenience and customer incentives

By Christine Blank
February 01, 2010

The phrase "out with the old and in with the new" does not necessarily ring true for retail seafood departments in 2010.

Many retailers' fresh - and frozen-seafood departments posted steady to even higher sales in 2009, despite a difficult economy. As a result, seafood managers say they will stick with what is working and add to it. They will continue to focus on offering fish, shrimp and other items at a value, while increasing their prepared-seafood offerings, which have been growing in popularity over the past few years.

"Due to the tough economic circumstances, many customers turned to preparing food at home instead of restaurant dining. As a result, we saw our 2009 sales increase at all Food Lion LLC banners," says Jennifer Speck, a spokesperson for Food Lion, owned by 
the Delhaize Group of Brussels, Belgium.

Steve Gyland, owner of Cod & Capers Seafood Market in Palm Beach Gardens, Fla., agrees with the eating-at-home trend. "There is certainly a demand for value-added products, but also an increased demand for the raw product," says Gyland. "It seems that people are getting the raw product to take and have an evening at home, instead of going out."

While 2009 was a tough year for Cod & Capers, Gyland began aggressive marketing programs that he plans to expand on in 2010. "In 2009, we marketed ourselves more aggressively with discounts and offers. We are dealing with highly perishable goods, so some margin is better than no margin," he says.

Offering quality seafood - including tilapia, cod, farmed salmon and shrimp - at a value was one of the primary trends in 2009 that retailers plan to continue this year.

"People were buying less expensive fish. We were selling more tilapia and [farmed] Canadian salmon," says Jill Moorhead, marketing director for The Hills Market, an independent in Columbus, Ohio. As a result, the specialty store that offers a variety of fresh, frozen and shelf-stable foods started a value program in 2009 that was well received by shoppers. Every week, the store offered one seafood item at $2 off per pound.

In addition, The Hills was able to offer a higher quality frozen, cooked cocktail shrimp by switching brands from CenSea to Contessa Premium Foods, says Moorhead. The 2.5-pound packages of Contessa frozen shrimp normally retail for $13.99 a pound, and The Hills puts them on special for $11.99 a pound several times a year.

The Hills' aggressive 
shrimp promotions in November and December helped to boost sales. For Thanksgiving, shoppers who purchased a free-range turkey received a coupon for $2 off per pound on Contessa shrimp. "If you're coming in for your main course, we're encouraging adding seafood as appetizers," says Moorhead.

In similar fashion, shoppers who spent $50 or more in The Hills' meat and seafood departments for the month of December received a coupon for $4 off per pound on Contessa shrimp, on top of the $2 per-pound Thanksgiving discount.

Schnucks Market of St. Louis was also able to offer shrimp at a value over the past year. "The most dramatic change has been in the ability to offer wild, domestic [Gulf of Mexico] shrimp at attractive retails, due to historical lows in the market," says Steve Disko, seafood category manager for Schnucks.

Retailers also priced fish fillets competitively this year. "Tilapia and salmon sales picked up in the past year. In this area, we are the only ones getting aggressive on seafood," says Bob Hartman, director of deli and seafood for DeMoulas Super Markets in Tewksbury, Mass., which has around 60 locations in the Northeast under the DeMoulas and Market Basket banners.

Thanks in part to opening a new distribution center this year and placing tighter controls on seafood buying, DeMoulas was often able to offer tilapia fillets for $4.99 a pound and fresh haddock fillets for $5.99 a pound.

Successful seafood promotions in 2009 at Food Lion, Bloom and the retailer's other banners featured tilapia, cooked and raw shrimp, salmon and snow crab.

"In 2009, we saw customers focus on products that they were familiar with; they were less likely to try new seafood variations or selections," says Speck.

In Food Lion's frozen-seafood sections, shoppers also sought value and focused on familiar selections. Still, shoppers are picking up frozen-seafood offerings new to Food Lion stores, including a Beacon Light and Trident steam-in-the-bag single-serve portion fish. "Food Lion, Bloom and Bottom Dollar increased promotional activity and continue to see sales growth in this category," says Speck.

LaBonne's Market, a three-store operator in Woodbury, Conn., is also adding to its frozen-seafood offerings. "It's an area that we look to expand in 2010 with a line of frozen fillets. People are looking for the quick, easy meal now," says Ken De La Rosa, meat and seafood director for LaBonne's.

As consumers demand convenient foods, retailers say they plan to expand their value-added seafood offerings or offer them for the first time this year.

"Our prepared-food 
section has done very well for us, and we're certainly going to continue that," says Cod & Caper's Gyland. The seafood market's prepared meals include Pompano Almondine and Pistachio-Breaded Snapper, packaged along with a vegetable and starch. Retail prices range from $12.95 to $16.95 per meal.

Hartman with DeMoulas would like to start a value-added program for the 60-store chain with three or four breaded or marinated seafood items. "The demand is there; we will see how big it gets," says Hartman.

Food Lion is also expanding prepared- seafood offerings, but Speck did not say which items it plans to add. "We are evaluating additional varieties of easy-to-prepare items for our fresh-seafood department," says Speck.

While seafood retailers consider how to grow their value-added sections, they plan to continue offering quality seafood at a value. Some plan to offer aggressive price points on at least one fish or shellfish item per week. Others want to ramp up or test new marketing efforts. Cod & Capers, for instance, utilized local newspaper advertising, direct mail pieces and e-mail marketing in 2009 and will try different forms of marketing throughout 2010.

"In 2010, I think we are absolutely going to have to be extremely proactive in marketing ourselves and our products. We can't sit back and hope [customers] walk in the door," says Gyland.

 

Contributing Editor Christine Blank lives in Lake Mary, Fla. 

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