Delicatessen and small goods.
Smallgoods has proven to be an extremely resilient category as the pandemic is boosting retail sales, although rising raw material costs for many products result in higher shelf prices.
"Although we're down from FY20, growth numbers remain impressive for two years, especially in prepackaged ranges," said Greg Wooller, director of grocery sales at Don Smallgoods.
Prior to Covid, the entire small merchandise category saw a slow, long-term shift in sales from traditional deli to prepackaged offerings in the dairy and deli express / barge point of sale.
This was primarily due to slow buyers, increased interest in product claims (welfare, sourcing, nutrition, etc.), packaging convenience, and perceived freshness, says Mr Wooller.
“As a result of the recent Covid pandemic, we have noticed an acceleration in this shift in sales from delicatessen to packaged offers,” he says.
"Aside from concerns about social distancing (waiting in deli) and a desire to shop faster (less exposure / risk), pre-packaged small merchandise sales are now greater than deli sales across the market in both volume and value."
Puopolo General Manager of Sales Rebecca Bremner is also observing the shift in demand from delicatessen to packaged products.
"We have seen a steady increase in sales in our retail / take-home range," she says. “Fortunately, we had already started working on our fixed weight retail range before Covid-19 changed customer buying habits. Delis selling our larger salami and sausages really noticed that more customers preferred to grab and walk instead of standing around others and waiting for the staff to cut up small items fresh. ”
Another impact of Covid-19 on consumer behavior was the desire to indulge in fun wellness products at home, says Erez Shahak, CEO of Quality Food World.
“Eating had to be the new food out,” he says. “We saw from our own sales that we had high sales figures during all lockdowns. We have also seen a shift from the deli to pre-packaged small items as consumers seem to be looking for convenience, portion size and the ability to choose from a range of brands. "
According to Wooller, delicatessen items remain very important for many customers and still make up around 50 percent of the value of goods.
"However, we have seen a long-term trend that small pre-packaged goods are outgrowing the market," he says. “While delicatessen offers are available online from major retailers, prepackaged products seem to be better tailored to the needs of online customers. As online continues to grow strongly, this offers an opportunity for the category. "
For more information on Deli & Smallgoods trends, see the latest issue of Retail World.
