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Editors Note: Service or not, retail seafood will survive

Fiona Robinson, Editor in Chief
By Fiona Robinson, Editor in Chief
April 01, 2007

As this issue went to press in late March, Stop & Shop and Giant supermarkets in the Northeast and Mid-Atlantic, both owned by Dutch conglomerate Royal Ahold, announced they were converting some of their full-service seafood counters into self service. Before you rush to judge this as the beginning of the end of seafood at supermarkets, think again.

Seafood has long been viewed as a loss leader for supermarkets. In their rush to compete for market share, chains have focused on perishables like seafood - whether it makes money or not they maintain the variety of products to bring new customers in. But once they do the grand-opening walk through with all of the giveaways, those customers rarely return to the seafood department.

Full-service seafood means full-time labor, and supermarkets rarely are able to keep skilled employees in the seafood department. Once they learn the ropes, seafood counter staff often transfer to the meat or deli department. Also, consider Stop & Shop and Giant's core markets are New England and the Mid-Atlantic, both regions with plenty of independent retail seafood markets dedicated entirely to selling seafood. There are plenty of supermarkets that do a great job with seafood, but chains that are unwilling to pay to keep skilled labor behind the counter are only doing half the job. It's great to have a variety of seafood products, but variety means nothing without the labor required to sell it.

So both supermarket chains will have fewer seafood SKUs, but will focus on the species they sell best, which probably includes shrimp, salmon and whitefish like tilapia. Their core seafood customers will still buy seafood from them, even if it's in a Styrofoam package instead of a plastic bag. Customers these days want convenience, and self-service is a lot faster than a take-a-number-and-wait scenario.

It just doesn't make sense to keep throwing money into a full-service seafood department if it's not giving any returns. It's analogous to owning a boat - it's just a giant hole that you keep throwing money into. At some point you have to step back and analyze the situation, and certainly other supermarket chains will follow Ahold's lead. As the baby boomer generation pushes increased demand for a lean, nutritious protein, seafood sales, whether from a full-service or self-service counter, will continue at a steady pace for many years to come.

 

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