The Supermarket News 2022 Survey conducted from mid-March through mid-April confirmed a trend towards increased sales of fresh foods. Among the respondents, 70 percent noted increased sales in the perimeter categories during the twelve months preceding the survey with only four percent recording decreased sales.  The magnitude of sales growth was also striking ranging from one percent to 15 percent. More than a quarter of responding stores experiencing a 4 percent to 6 percent increase in same-store sales among fresh categories with an emphasis on meat, dairy and produce. Retailers expect perimeter sales to continue increasing with growth rates ranging from one to nine percent.

Conventional supermarkets consider large stores including Walmart as their major competitors with 38 percent of respondents citing the “big-box” category.  Approximately one-quarter of the retailers recognize online sales as competition with an equal weighting of 6 percent assigned to club stores, convenience stores, farmers, markets and natural and organic retailers.

Margins were generally higher according to half of the respondents with dairy including eggs eliciting a positive response from 44 percent of those providing data. Only a quarter of the respondents experienced a decline in either bakery or dairy categories.

Availability of trained personnel in deli, meat and dairy sections was regarded as the most important challenge for retailers.  This factor was followed by supply-chain disruption with concerns over the invasion of Ukraine by the Russian Federation with resulting effects on trade and shipping and the consequential contribution to inflation.

Retailers are aware of both the overhang from COVID and current high inflation as drivers of continued perimeter sales.  Despite sensitivity to price, consumers are still seeking quality, freshness but not necessarily variety.  Shifts in purchases of dairy, bakery and meat were ascribed to a preference for home cooking although fast casual restaurants and QSRs are regarded as the major competitors with respect to perimeter sales. 

Respondents indicated that future strategies to increase sales and to become more competitive included introduction of grab-and-go items, store promotions, increasing space for prepared foods and providing products with fewer additives.  It was interesting that promoting plant-based  alternatives to meat was noted by only 17 percent of respondents as a competitive strategy in response to competition. Alternatives to meat ranked behind COVID safety measures and slightly ahead of internationally inspired recipes.