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Deli Consumer (The) - US - December 2011

In recent years, delicatessen operators have diversified product selection, expanding far beyond lunch meat and cheeses, to include prepared meal solutions, in-store sandwich shops, beverage centers and other specialties. Consequently, a well-managed in-store delicatessen (ISD) can play an integral role in separating a retailer from the competition and making it a destination choice for all shopping needs. ISD operators can benefit in much the same way, with the deli’s influence expanding throughout the store, yielding increased foot traffic and complementary purchases in other aisles (e.g., bread, snacks, beverages, condiments).

From a financial perspective, deli operations provide attractive margins, but face many challenges, including a continued sluggish economy, lack of consistent and continual deli foot traffic and purchases, and channel competition from supermarkets and non-supermarket retailers. With this in mind, Mintel has developed its first-ever report focused on the deli consumer, providing insights on the following topics:

  • The deli industry’s response to channel competition, in terms of product development and marketing, to let consumers know that it is meeting their growing interest in eating better
  • The impact of key market drivers and what steps deli operators are taking to maximize sales opportunities and discover new potential avenues for growth
  • An analysis of how consumer perception of fresh versus pre-packaged deli products influences the industry overall and in particular the competitive environment
  • The role of household income, gender, race/Hispanic origin, and other demographic factors in driving deli sales and shaping the overall market
  • How the supermarket channel has an opportunity to win back lost market share (to mass merchandisers and other channels) with ISDs

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Segment share data
            • Consumer data
              • Advertising creative
                • Acronyms and terms
                  • Acronyms
                    • Terms
                    • Executive Summary

                      • As sales grow, ISDs evolve into meal solution centers
                        • Price/value remains top of mind with deli buyers
                          • Interest in value and deli quality perception
                            • Lunch meat’s popularity drives deli usage
                              • Supermarkets are format of choice for deli purchases
                                • Delis need to address pricing/value concerns to attract non-deli buyers
                                • Insights and Opportunities

                                  • Proactively promote healthier deli items
                                    • Expand prepared meals solution menu
                                      • Offering vegetarian deli options and more side dishes
                                        • Warehouse clubs could be more aggressive with deli operations
                                          • Labeling systems ripe for delicatessens
                                          • Inspire Insights

                                              • Trend 1: Experience Is All
                                                • A reinvention may be due
                                                  • Trend 2: Extend My Brand
                                                  • Market Drivers

                                                    • Recession-weary deli consumers seeking value
                                                      • Figure 1: Changes in food price indexes, 2009 through 2012
                                                    • Restaurant index indicates potential for more deli meal solutions
                                                      • U.S. deli item dollar share and dollar sales growth
                                                        • Figure 2: U.S. deli item share*
                                                        • Figure 3: U.S. deli item dollar sales growth*
                                                      • Number of households with children is declining
                                                        • Figure 4: Households by presence of children, 1999-2009
                                                    • Competitive Context

                                                      • Key points
                                                        • Value brands enjoy competitive advantage over premium products
                                                          • Deli lunch meat enjoys quality perception over pre-packaged variety
                                                            • National lunch program eats into deli usage occasions
                                                              • C-store emphasis on fresh food makes them a lunchtime destination
                                                                • Growth of specialty retailers tapping into consumers’ interest in variety
                                                                  • Refrigerated lunches’ growth slowing but still a competitive threat
                                                                  • Innovations and Innovators

                                                                    • Key points
                                                                      • Retailers turning to technology to keep deli line moving
                                                                        • Publix Kids Deli Meal targets time-strapped parents and their children
                                                                          • Retailers are integrating BFY options among mainstream deli items
                                                                            • Boar’s Head positions itself as BFY option
                                                                              • Subway Café test concept is moving sandwich maker into upscale market
                                                                              • Marketing Strategies

                                                                                • Key points
                                                                                  • Deli promotional activity retreats from 2010’s record levels
                                                                                    • Figure 5: 2010 types of deli promotions used by retailers
                                                                                  • Sara Lee Deli targets women with new social media campaign
                                                                                    • Dominick’s wants to have customers over for lunch
                                                                                      • Television advertising
                                                                                        • Kroger private label brands
                                                                                          • Figure 6: Kroger/private label brands, January 2011
                                                                                        • Dahl’s supermarkets
                                                                                          • Figure 7: Dahl’s/Dahl’s deli, bakery and floral departments, April 2011
                                                                                        • Marsh supermarkets
                                                                                          • Figure 8: Marsh/Marsh Deli, December 2010
                                                                                      • Retail Purchases of Deli Products

                                                                                        • Key points
                                                                                          • Cold cuts usage high across age, household income, and children groups
                                                                                            • Figure 9: Household cold cut usage, by age, April 2010-June 2011
                                                                                            • Figure 10: Household cold cut usage, by household income, April 2010-June 2011
                                                                                          • Kids’ cold cuts usage slips slightly
                                                                                            • Figure 11: Kids’ cold cut usage, by kids aged 6-11, May 2005-June 2011
                                                                                          • Teens’ cold cuts usage lower than kids
                                                                                            • Figure 12: Teen cold cut usage, by teens aged 12-17, May 2005-June 2011
                                                                                        • Delicatessen Usage and Locales

                                                                                          • Key points
                                                                                            • Primary deli item target audience spans diverse collection of demographics
                                                                                                • Figure 13: Delicatessen users, August 2011
                                                                                              • Supermarkets favored destination for deli items purchases
                                                                                                • Figure 14: Where consumers make deli purchases, by gender, August 2011
                                                                                                • Figure 15: Where consumers make deli purchases, by age, August 2011
                                                                                                • Figure 16: Where consumers make deli purchases, by household income, August 2011
                                                                                                • Figure 17: Where consumers make deli purchases, by presence of children in household, August 2011
                                                                                                • Figure 18: Where consumers make deli purchases, by region, August 2011
                                                                                            • Delicatessen Usage/Purchase Frequency

                                                                                              • Key points
                                                                                                • Supermarkets generate most frequent deli purchase occasions
                                                                                                  • Figure 19: Delicatessen purchase frequency, August 2011
                                                                                                • Supermarkets with deli departments (net)
                                                                                                  • Figure 20: Delicatessen purchase frequency, by age, August 2011
                                                                                                  • Figure 21: Delicatessen purchase frequency, by household income, August 2011
                                                                                                  • Figure 22: Delicatessen purchase frequency, by presence of children in household, August 2011
                                                                                                  • Figure 23: Delicatessen purchase frequency, by region, August 2011
                                                                                              • Types of Products Purchased at Delicatessens

                                                                                                • Key points
                                                                                                  • Lunch meat and cheese remain deli staples
                                                                                                    • Figure 24: Types of products purchased at delicatessens, August 2011
                                                                                                    • Figure 25: Types of products purchased at delicatessens, by gender, August 2011
                                                                                                    • Figure 26: Types of products purchased at delicatessens, by age, August 2011
                                                                                                    • Figure 27: Types of products purchased at delicatessens, by household income, August 2011
                                                                                                    • Figure 28: Types of products purchased at delicatessens, by region, August 2011
                                                                                                • Shifts in Purchasing Habits in the Last Year

                                                                                                  • Key points
                                                                                                    • Women more likely than men to be cutting back on deli spending
                                                                                                      • Figure 29: Shifts in purchasing habits, by gender, August 2011
                                                                                                      • Figure 30: Shifts in purchasing habits, by age, August 2011
                                                                                                      • Figure 31: Shifts in purchasing habits, by household income, August 2011
                                                                                                      • Figure 32: Shifts in purchasing habits, by presence of children in household, August 2011
                                                                                                  • Reasons for Using Delicatessens

                                                                                                    • Key points
                                                                                                      • At-home prime deli usage occasion
                                                                                                        • Figure 33: Reasons for using delicatessens, by age, August 2011
                                                                                                        • Figure 34: Reasons for using delicatessens, by household income, August 2011
                                                                                                        • Figure 35: Reasons for using delicatessens, by presence of children in household, August 2011
                                                                                                    • What Matters to Deli Users

                                                                                                      • Key points
                                                                                                        • Price/value and freshness/appearance carry most weight at deli counter
                                                                                                          • Figure 36: What matters to deli users, by gender, August 2011
                                                                                                          • Figure 37: What matters to deli users, by age, August 2011
                                                                                                          • Figure 38: What matters to deli users, by household income, August 2011
                                                                                                          • Figure 39: What matters to deli users, by presence of children in household, August 2011
                                                                                                          • Figure 40: What matters to deli users, by region, August 2011
                                                                                                      • Why Consumers Don’t Use Delicatessens

                                                                                                        • Key points
                                                                                                          • Pricing and value perception hurting deli operations
                                                                                                              • Figure 41: Why consumers don’t use delicatessens, by gender, August 2011
                                                                                                              • Figure 42: Why consumers don’t use delicatessens, by age, August 2011
                                                                                                              • Figure 43: Why consumers don’t use delicatessens, by household income, August 2011
                                                                                                              • Figure 44: Why consumers don’t use delicatessens, by presence of children in household, August 2011
                                                                                                            • Other reasons consumers don’t use delicatessens
                                                                                                            • Impact of Race and Hispanic Origin

                                                                                                              • Key points
                                                                                                                • Cold cuts usage highest among whites, blacks, and Hispanics
                                                                                                                  • Figure 45: Household cold cut usage, by race/Hispanic origin, April 2010-June 2011
                                                                                                                  • Figure 46: Where consumers make deli purchases, by race/Hispanic origin, August 2011
                                                                                                                  • Figure 47: Delicatessen purchase frequency, by race/Hispanic origin, August 2011
                                                                                                                  • Figure 48: Types of products purchased at delicatessens, by race/Hispanic origin, August 2011
                                                                                                                  • Figure 49: Shifts in purchasing habits, by race/Hispanic origin, August 2011
                                                                                                                  • Figure 50: Reasons for using delicatessens, by race/Hispanic origin, August 2011
                                                                                                                  • Figure 51: What matters to deli users, by race/Hispanic origin, August 2011
                                                                                                              • Custom Consumer Groups

                                                                                                                  • Key points
                                                                                                                    • Lunch meat most frequently purchased items
                                                                                                                        • Figure 52: Types of products purchased at delicatessens, by frequency group usage, August 2011
                                                                                                                      • Most frequent deli customers maintain loyalty despite the economy
                                                                                                                          • Figure 53: Shifts in purchasing habits, by frequency group usage, August 2011
                                                                                                                        • Frequent deli buyers have most favorable opinion of deli
                                                                                                                          • Figure 54: Reasons for using delicatessens, by frequency group usage, August 2011
                                                                                                                        • Price/value and freshness/appearance matter most to deli buyers
                                                                                                                          • Figure 55: What matters to deli users, by frequency group usage, August 2011
                                                                                                                      • Appendix: Other Useful Consumer Tables

                                                                                                                        • Frequency of usage by delicatessen type
                                                                                                                          • Figure 56: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 57: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 58: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 59: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 60: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 61: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                          • Figure 62: Delicatessen purchase frequency, by gender, August 2011
                                                                                                                        • Other consumer tables
                                                                                                                          • Figure 63: Types of products purchased at delicatessens, by presence of children in household, August 2011
                                                                                                                          • Figure 64: Shifts in purchasing habits, by region, August 2011
                                                                                                                          • Figure 65: Reasons for using delicatessens, by gender, August 2011
                                                                                                                          • Figure 66: Reasons for using delicatessens, by region, August 2011
                                                                                                                      • Appendix: Trade Associations

                                                                                                                        Companies Covered

                                                                                                                        • 7-Eleven (North America)
                                                                                                                        • American Association of Meat Processors (AAMP)
                                                                                                                        • American Cheese Society
                                                                                                                        • American Diabetes Association
                                                                                                                        • American Heart Association, Inc.
                                                                                                                        • American Meat Institute (AMI)
                                                                                                                        • Applegate Farms
                                                                                                                        • Arby's Restaurant Group
                                                                                                                        • Butterball, LLC
                                                                                                                        • Costco Wholesale Corporation
                                                                                                                        • Dahl's Foods Inc.
                                                                                                                        • Dole Food Company Inc.
                                                                                                                        • Dominick's Finer Foods
                                                                                                                        • Facebook, Inc.
                                                                                                                        • Food Marketing Institute
                                                                                                                        • Food Products Association
                                                                                                                        • Frito-Lay, Inc
                                                                                                                        • Grocery Manufacturers Association (GMA)
                                                                                                                        • International Dairy·Deli·Bakery Association
                                                                                                                        • Kraft Foods Inc. (U.S.A.)
                                                                                                                        • Marsh Supermarkets, Inc
                                                                                                                        • McDonald's U.S.A.
                                                                                                                        • National Meat Association (NMA)
                                                                                                                        • Natural Products Association
                                                                                                                        • Panera Bread Company
                                                                                                                        • Pepsi-Cola North America
                                                                                                                        • PepsiCo Inc
                                                                                                                        • Potbelly Sandwich Works
                                                                                                                        • Price Chopper
                                                                                                                        • Private Label Manufacturers Association (PLMA)
                                                                                                                        • Publix Super Markets
                                                                                                                        • SAM's Club
                                                                                                                        • Sara Lee Food & Beverage
                                                                                                                        • Subway
                                                                                                                        • Susan G Komen
                                                                                                                        • Target Corporation
                                                                                                                        • The DIRECTV Group Inc.
                                                                                                                        • The Kroger Co.
                                                                                                                        • The New York Times Company
                                                                                                                        • The Quiznos Master LLC
                                                                                                                        • The Vegetarian Resource Group
                                                                                                                        • Trader Joe's Company Inc
                                                                                                                        • Tyson Foods Inc.
                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                        • U.S. Bureau of the Census
                                                                                                                        • U.S. Department of Agriculture
                                                                                                                        • Walmart Stores (USA)
                                                                                                                        • Whole Foods Market Inc

                                                                                                                        Deli Consumer (The) - US - December 2011

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