June/July, 2010

From the Editor

The Deli's Inferiority Complex

The supermarket deli department has an inferiority complex. If we don’t act to change that way of thinking, the deli department won’t be able to fully capitalize on the next upswing in the economy.

Take sandwiches: To get from my office to the supermarket, I drive past three sub chains. Want a good reason to pass them by? Quality is reason one.

If you want a roast beef sub at my local supermarket, you can pay a little extra and get a premium brand of roast beef. That is just not available at any of the three shops I passed to get to the supermarket.

I can’t say the supermarket takes much advantage of this quality option. You might think the chain would trumpet this quality edge. But you would be wrong. The in-store marketing for its sandwiches is always based on price — no marketing or promotion at all besides a weekly special.

To know what’s wrong with private-label programs, just look at how most stores promote store-name sandwich programs. Though there’s often a line at the deli’s sandwich counter, it’s certainly not due to any efforts to build the sandwich category.

In fact, the executives at supermarket deli operations dependent on strong sandwich sales should probably say a little prayer every night thanking Subway. Its decade-long relationship with Jared has established it as a reasonably priced, reasonably healthy venue. Surely half the people in the lunchtime line are there because the marketing of Jared and his story made them realize they can get a tasty meal — and do something good for their waistlines and their health at the same time.

Such marketing is virtually absent from most deli sandwich operations. All they offer is a discounted sub of the week or an ongoing “value meal” discount promotion where you get a bag of chips and a soda.

Supermarkets could do so much that could be effectively marketed right now; just a little integration with other departments and the deli could both blow away its foodservice competitors and encourage trial throughout the store.

The rule at most supermarket sandwich programs is complete flexibility for any product sold at the service deli counter and none at all for anything else in the store. Although most programs have pre-sliced, pre-portioned meats and cheeses to make the sandwiches, most will gladly cut to order anything in the deli a customer wants.

This under-marketed option means a customer can get a unique flavor, such as horseradish cheddar with that roast beef sub — and that is simply not available at the stand-alone sandwich shops. Yet we’ve never seen a supermarket chain sandwich operation actually do a study, and promote the results, as to how many more options it offers than ‘ye olde sub shop’ down the street. Don’t they remember how successful one hamburger chain’s “Have it your way” slogan was?

Of course, the options the deli sandwich counter presents are a small fraction of what it could offer.

The weekly special based on price and usually co-marketed with a branded meat or cheese really should be used to introduce consumers to other great products sold in the store. How about a sub made with delicious heirloom tomatoes being sold in the produce department? That’s a two-fer: A reason to buy the sandwich — since chain sandwich shops don’t offer that option — and a sampling program for those heirloom tomatoes.

Yes, it would complicate operations some. It’s nice to be able to order trays of pre-sliced standardized gas green tomatoes grown to work perfectly on a slicing machine from a vendor, but you don’t win customers by doing what’s easy. You win customers by doing what the “other guy” finds impossible to do.

Is a bag of chips and a soda the limit of our creativity? Our deli departments are in the middle of a modern supermarket, a triumph of western technology gathering every delicacy from the four corners of the earth at a reasonable price, and all we can do is offer the same bag of chips and soda that every sandwich chain offers?

How much of a stretch would it be to offer a bag of baby carrots or little container of grapes as they do at Disney World? Can’t we figure out how to offer a pickle? A little packet of cole slaw? A cookie from the bakery for dessert? How about one of the hundreds of juices, teas and specialty beverages we’re already selling?

It’s all part of the inferiority complex. We market on price because we imagine it’s the only reason people will buy our products. We don’t actually market much at all, because we don’t believe in what we’re doing. We sell value meals with a bag of chips and a soda — completely out of sync with the healthy marketing that drives the sandwich category — because sandwich chains do and we benchmark ourselves against their offer.

With indications that the economy is getting better, we’re at risk of losing those customers who traded down from restaurants and are in our stores now. If we lose them, it won’t be because we can’t compete; it will be because we don’t compete. Forewarned is forearmed.  DB