March, 2006

Cover & Feature Stories

Making the Grade

For 18 consecutive years, Produce Business has conducted an annual Mystery Shopper Report. The specific methodology has changed, experiments have been tried, but the essential remains: Send a team of people out into the stores to experience our products as consumers do.

This year’s Mystery Shopper Report has a twist. We asked three industry volunteers — people on the supply side — to be our mystery shoppers. We asked them to report their perceptions of what happens to their product when it appears before the consumer. And we took three geographically diverse markets — an East Coast, a West Coast and a Midwest city.

Why is this important? One of our shoppers, John Pandol, Mexican sourcing and special projects at Pandol Brothers Co., Delano, CA, says it as well as anyone: “There is no substitute to seeing your product as the consumer sees it at the moment of truth. It’s less important what a grape looks like when it is on the vine, or in the box, or when the bird dog looks at it, or when the truck arrives at a distribution depot. What ultimately counts is does the product have the something to drive it through the cash register?”

Indeed. It is astonishing how many companies spend countless millions to make sure product is in perfect condition when it leaves their facilities but not a single nickel to evaluate its condition when sold to the consumer — although only consumer satisfaction with the product can result in increased and, thus, repeat sales.

The customer’s experience goes beyond the product itself. One of the founding columnists of Produce Business was a learned professor named Max Brunk from Cornell. He wrote often on the virtues of the “silent salesman” and did extensive research confirming how merchandising decisions impact sales.

Our shoppers this year discovered some important truths: An East Coast distributor who requested anonymity so his customers won’t blame him as the carrier of bad news, found that there was often more difference between the way the same store appeared at different times of the day than there was between totally different stores. In other words, many stores look good when they are fully staffed, but many look awful as product runs down and the day crew goes home.

Karin Gardner, communications manager at the Oppenheimer Group. Seattle, WA, was frank about her own behavior and the limits of claiming consumers will pay for quality. In a hip, upscale neighborhood, in a high quality store she gave top marks to in almost every category, she put down the mid-size organic pineapple when it rang up at $12.17.

That retailers need to know how their customers experience the produce department goes without saying. After all, how else can they improve their own operations? But the rest of the produce industry cannot be indifferent to the matter.

Programs such as 5-A-Day and the commodity-specific promotion boards are designed to boost produce consumption and thus build sales. But sales, in general, cannot be increased unless specific venues sell more produce and the quality of the consumer experience is satisfactory — whether that experience is measured by product quality or the quality of the physical facilities, personnel or an array of information and services surrounding the produce.

Years of Mystery Shopper experience has taught us that many decent venues for the sale of produce become horror stories when the regular, full-time help goes home. This is a big problem and one growing bigger with more 24-hour outlets opening.

Many stores seem to have a policy of filling up the shelves when the full-time help leaves and then letting the department “run down” until the next morning. They maintain a skeleton crew dedicated to produce or, in more than a few cases, no dedicated produce personnel at all.

This not only means that the produce department has a lot of out-of-stocks as things run down but it also virtually guarantees a disgusting experience for consumers. Flies on an open piece of fruit...a consumer reaches into a section and encounters something moldy...a broken fresh-cut fruit bowl leaking over.

Note: All stores visited were graded in eight areas on a scale ranging from A for excellent to F for failing. The area designated Consumer Information refers to information about nutrition, country of origin, recipes, etc.

EAST COAST REPORT

All visits by this industry insider, who wished to remain anonymous, were to stores in the same general area, within shopping distance of the insider’s house. The goal was to compare the shopping choices a customer would have in a particular neighborhood.

With one exception, the visits were on the same day, to compare under like conditions. The time was the late afternoon, early evening because this is the time of greatest opportunity to observe consumers shopping our products.

“In general, all of the stores normally look decent during the day, when the regular, full-time help is working,” says the Mystery Shopper. “The greatest difference at night is the lack of the employees interacting with the consumers and the general run-down condition of the departments.

STORE 1

The first store is part of a regional buying group selling under the same banner. Without directly revealing its slogan, the retailer claims the friendliest staff in town. The store underwent a major expansion and remodel several years ago so it should have a nice appearance inside.

When visited: 6:00 pm, Wednesday

Cleanliness: D — dirty rugs, floor, cases.

Overall Merchandising: D — product was basically just put on the stand, although there was an attempt to stack some wet vegetables. Poor space allocation and no impulse displays.

Consumer Information: F — none noticed. Simple item and price signing.

Breadth of selection: C — limited variety and some packaged organics.

Pricing: C — advertised items priced low and regular items seemed high.

Availability of Personnel: C — one employee who disappeared after packing out a case of beans.

Knowledge of personnel: D — unknown since the employee seemed to go out of his way to avoid contact with customers.

Unique Features: D — none, plain, old-fashioned department, nothing special

General buying experience/observations: The store looks old and dirty and the product looked old on the stand. Moldy tomatoes and wrinkled and bruised apples were on display.

STORE 2

This store is part of a local, 27-store chain with a long history in the area. The customer base is mostly white collar, mid- to upper-income. This store is in the middle of a major re-model in which produce is being relocated from the end of the store to the entrance area.

When visited: 4:20 pm, Thursday

Cleanliness: B — clean floor and relatively clean cases.

Overall Merchandising: B — space allocation and product location correct for the season. Organics integrated with conventional products.

Consumer Information: A- — country of origin on every sign. Nutritional information charts clearly posted in the department. Very little recipe information.

Breadth of selection: A- — wide selection of conventional and organic products. Some exotic variety not carried.

Pricing: D — high prices for most products.

Availability of Personnel: B — one employee in the aisle.

Knowledge of personnel: B — employee answered questions when asked by the customers and knew what he was talking about.

Unique Features: C — Ready-to-eat summer fruits from Chile not refrigerated. Large tomato and mushroom variety selection.

General buying experience/observations: This department looked very good in general, excellent for a store undergoing a remodel. All product was fresh and there was no product that needed to be culled from the stand.

STORE 3

This large footprint conventional supermarket is part of a large regional chain in the New York tri-state area. Usually known for low prices and ordinary merchandise, the stores are known to attract the urban and blue-collar consumer. Lately, it has been trying to advertise more of an upscale image with emphasis on fresh departments, including produce.

When visited: 5:50 pm, Thursday

Cleanliness: C — dirty floors.

Overall Merchandising: C — ordinary displays, no impulse merchandising, no sampling.

Consumer Information: F — nothing noticeable while shopping.

Breadth of selection: B — some variety, few organics.

Pricing: C — higher prices than one would expect for a low-price image store.

Availability of Personnel: F — no one in the produce department.

Knowledge of personnel: N/A — no personnel noticed in the department.

Unique Features: C — lots of pre-packed trays and bagged items to choose from, showing some savings over purchasing loose.

General buying experience/observations: This produce department needed a lot of attention. It appeared there had not been an employee in the aisle for some time. The floor was dirty and there were holes on the stand. A lot of product needed to be culled. Customers were looking for assistance, particularly to find out if additional product was in the cooler for empty displays. Products were identified with a simple item and price sign with no noticeable country-of-origin or nutritional information.

STORE 4

This large regional chain buys through a co-op. The store’s slogan promotes freshness and low price. This store was recently re-modeled and expanded.

When visited: 6:30 pm, Thursday

Cleanliness: B — good job of keeping up with the floor; relatively clean cases.

Overall Merchandising: C — very large department but the first three display fixtures all had apples. Some items were hard to locate.

Consumer Information: B — very good nutritional signing but little country-of-origin.

Breadth of selection: B — lots of variety and limited organics, mostly packaged.

Pricing: B — low prices are the theme here.

Availability of Personnel: A — Three employees, working and talking to customers.

Knowledge of personnel: B — noticeable interaction with the customers suggesting products to buy, but not how to use them.

Unique Features: B- —This department appears to offer something for everyone, while trying to maintain the low-price leader image.

General buying experience/observations: Store was very busy for that time of evening. Lots of full shopping carts. Most products were fresh but some quality problems with others. The product defects appeared to be from lower grades rather than store-caused.

STORE 5

This is a medium footprint natural/organic food supermarket with locations across the country. It usually attracts health- and environmental-conscious consumers with higher-than-average incomes.

When visited: 5:30 pm, Thursday

Cleanliness: A — Mostly clean floor, signs and display cases. Floor was being swept during the visit.

Overall Merchandising: B — Very neat, well-stacked displays with some impulse merchandising. Although there were three employees walking around the store with samples of different chocolates, there were no samples of fresh produce available.

Consumer Information: B — Some nutritional info and country-of-origin noticeable. Very bold and clear signing differentiated conventional produce from organic produce.

Breadth of selection: C — Overall, very nice quality. Limited item selection compared to a conventional supermarket. Not much consumer choice between organic or conventional to purchase; it was mostly a choice of either/or. (They carried either conventional OR organic on most items, not conventional AND organic.)

Pricing: D — prices were very high on most products, conventional and organic.

Availability of Personnel: C — Total store had lots of help but the only produce employee who was noticed was the one sweeping the floor.

Knowledge of personnel: C — No one interacting with the consumers, although one could ask a question of the person sweeping the floor.

Unique Features: B — High, hand-stacked displays make the product look very nice.

General buying experience/observations: Large selection of organics, but less of a percentage to total than one would expect from this store. Lots of shoppers and a full parking lot gave the feeling of a busy store. Most orders, however, were in hand baskets averaging one or two shopping bags at checkout. There was a lot of interaction with the consumer in all of the other departments, especially the service departments.

STORE 6

National chain, basic format: This unit was remodeled a few years ago, but already looks old. The customer base is a wide range, mostly local residents.

When visited: 6:50 pm, Thursday

Cleanliness: D — partially dirty floor and cases.

Overall Merchandising: C — just ordinary, no special displays

Consumer Information: C — very little country-of-origin and nutritional infoBreadth of selection: C — some variety, some organics, lots of packaged value-added items

Pricing: C — a little high for the product that was being offered

Availability of Personnel: F — no one was available

Knowledge of personnel: N/A

Unique Features: C — Lots of store-made cut-fruit choices

General buying experience/observations: This department desperately needed attention. It looked as if no one had worked the stand for a long time. Lots of bruised apples needed to be culled — the entire rack needed to be straightened out. The salad bar was almost completely taken down so there was no way to create a salad for dinner. All service departments gave the impression the store was closing at 7:00, not 10:00 as advertised. The message to the consumer was clear: Don’t even think about shopping in the evening here.

MIDWEST REPORT

During a recent business trip to a midwestern city, seasoned Mystery Shopper John Pandol visited several formats. Pandol routinely inspects retail stores for his company to learn about their methods of merchandising his company’s products — mainly grapes.

Although Pandol has developed his own system of observational note keeping, we asked him to follow our format of grading.

STORE 1

This national club store has an extensive produce area with mainly larger volume bags of produce, ideally suited for small foodservice operations or large families.

When visited: 3:45 pm , Wednesday

Cleanliness: A

Overall Merchandising: B

Consumer Information: C

Breadth of selection: C

Pricing: A — everyday low pricing

Availability of Personnel: F — no one in the department

Knowledge of personnel: N/A

Unique Features: B — walk-in cooler for about half of the produce items.

General buying experience/observations: The grape pallets are parked in a walk-in cooler, a great place to observe consumers. Fresher product (labels on clamshells match boxes) was good. Old, leftover produce was substandard and should have been culled from the display sooner. (It will surely be thrown away later.)

Bonus observation: The sampler handing out cubes of cheese had built a molecular model from cheese cubes and toothpicks. Very cool.

STORE 2

Regional chain of about 200 up-scale stores promotes its high quality, low prices and superior customer service.

When visited: 6:00 pm , Wednesday

Cleanliness: A

Overall Merchandising: A+

Consumer Information: B

Breadth of selection: A

Pricing: C — another hi-lo model

Availability of Personnel: B

Knowledge of personnel: B

Unique Features: B

General buying experience/observations: Wow — very nice. Three built-up displays of boxes and fruit, oranges, grapefruit and apples, leading into the produce department. I can see the white foam boxes from the distance. Could it still be California grapes?

Chilean Flames and Thompsons in unzipped zip bags (or should I say unzippable zip bags) placed in the leftover five-down foam boxes in racks. Display well stocked and properly culled. Handwritten sign indicates Chilean grapes, which were on ad. Although the cross-merchandising crowd may kill me, I liked having all the ‘non-produce’ produce items in the back of the department instead of scattered throughout. A surprise in the fresh-cut section. In a cello overwrap store-prepared tray were a small bunch of grapes, both red and white, cubes of cheddar cheese and one strawberry, total weights 1 to 1.5 pounds at 3.59/pound. Max ring: $6.00. Just add wine and crackers.

Returning to my car I hear very loud music and hurry into my rental car. I see three teenagers in the next car passing a joint. An obvious case of the munchies; should I recommend the grape/cheese pack?

STORE 3

Strong regional banner of a national chain, with over 100 stores in the area, this supermarket caters to a mid- to upper-income crowd.

When visited: 10 pm, Wednesday

Cleanliness: A

Overall Merchandising: C

Consumer Information: B

Breadth of selection: B

Pricing: C — hi-lo model again

Availability of Personnel: C — personnel still in the store, but not in the department (close to quitting time)

Knowledge of personnel: N/A

Unique Features: C

General buying experience/observations: Department looked stocked and prepared for the next day. Average in size and assortment. Most of the staff was hanging around the cash register ready to call it quits.

STORE 4

This local chain store is supported by a national wholesale grocer.

When visited: 10:40 pm, Wednesday

Cleanliness: B

Overall Merchandising: C

Consumer Information: C

Breadth of selection: C

Pricing: B

Availability of Personnel: B — one person in the department at this time.

Knowledge of personnel: B

Unique Features: C

General buying experience/observations: Both ad flyer and in-store signage have white grapes on ad. Yea! Medium quality Thompsons packed in UK-style carry bags marked as white seedless. Bags did not have a country-of-origin statement, a violation of customs regulation.

The Chilean Flame seedless were of small size with dry stems. Many bags were half full, a tell-tale sign consumers had purchased a good bunch and left an inferior bunch behind.

The string zipper on these zip bags was of poor quality — inoperable. But these were logo bags, so I will send my spies in Chile to find out the manufacturer and never, ever use it.

STORE 5

Natural food grocer.

When visited: 11:50 am, Thursday

Cleanliness: A

Overall Merchandising: A

Consumer Information: A

Breadth of selection: B

Pricing: D

Availability of Personnel: A

Knowledge of personnel: A

Unique Features: B

General buying experience/observations: I love these stores. I’m convinced they do the business and get the price because they merchandise well and have super staff.

They are more elitist than green.

Three SKUs of Chilean grapes, conventionally produced. At 3.99/pound, they have the highest price in town but the grapes were about the same as the other better stores in town.

Slide-in slots for country-of-origin labels. All three grapes labeled California in early February (oops!). Also incorrectly labeled as California were the organic bananas, the coconuts, the papayas, the mangoes and some Gala apples. All bore stickers with different origins.

STORE 6

Limited assortment store with low prices. Open short hours and six days a week.

When visited: 11:30 am, Thursday

Cleanliness: B

Overall Merchandising: C

Consumer Information: C

Breadth of selection: D

Pricing: A+

Availability of Personnel: F

Knowledge of personnel: D

Unique Features: B

General buying experience/observations: This is a place to buy, not a place to shop. I might buy staples here but I’d pass on meat and produce. Two staff members I saw (a clerk and cashier) were dirty and not well dressed. Work done in backroom and pallets rolled out. I’m sure the place is a mess later in the day.

WEST COAST REPORT

Right before Super Bowl weekend, Karin Gardner began her Mystery Shopper tour. She covered an independent local retailer, a national chain store and a neighborhood chain.

STORE 1

Independent local retailer. Newer store located in upscale neighborhood. Overwhelmingly Caucasian community in a zip code including two universities and two major hospitals. The produce selection reflects preferences of university students and staff, stay-at-home parents and busy professionals. Organic produce is very prevalent, though typically one can choose organic or conventional for preferred items.

When visited: 4:40 pm, Friday

Cleanliness: A-

Merchandising: A+

Consumer information: B-

Breadth of selection: A-

Price: A — high, but quality was excellent

Availability of personnel: A

Knowledge of personnel: B+

Unique features: A

General buying experience/observations: This store boasts one of the most beautiful produce departments I have ever seen. Everything is always fresh and incredibly tempting. But it comes with its price.

On a previous visit, I had selected a medium-sized organic pineapple (no conventional available at the time). It rang up at $12.17. I love pineapple and needed one for that weekend, but I left it behind. What is there about a store that can charge more for a pineapple than it costs for a movie and a large popcorn? Or conversely, should we celebrate a store that values produce at such a dear price?

I did not see any staff in the department, so I browsed for about five minutes before a clerk wheeled a cart out of the back room. I asked where I could find baby seedless watermelon. She gestured toward the wall, where fresh-cut melon could be found, as well as some whole honeydews and cantaloupes, and indicated they were out of baby watermelons.

When I asked if they were in season, she grabbed the lifeline and said they weren’t.

I asked an associate stocking potatoes where bell peppers were. He walked me over to the color-coded peppers, stacked uniformly with stems facing out. He said he thought red, yellow and orange peppers taste about the same and are similarly sweet. He explained a green pepper is an immature red pepper, and the other two colors are totally different varieties.

“They come from Mexico right now. They grow in greenhouses, so you’d never know.” he said and helped me select a perfect yellow one.

I added a bunch of bright red cluster tomatoes to my basket and headed to the checkout where my 1.5 pounds of gorgeous tomatoes ran me almost $8. I had peeled the PLU sticker off the yellow pepper. The person checking me out, the store director, couldn’t remember the PLU code for yellow peppers, but he asked the associate behind him who rattled it off in no time.

“Our people memorize around 2,000 PLU codes,” he told me apologetically, “but I’m getting too old for that.”

STORE 2

Older store (built in 1951) that is part of a national chain, located in an upscale, diverse neighborhood. Store has not been physically updated, but new branding is reflected in store promotional signage.

When visited: 5:10 pm, Friday

Cleanliness: B

Merchandising: B-

Consumer information: B+

Breadth of selection: A-

Price: A — promotional pricing on popular items

Availability of personnel: A-

Knowledge of personnel: B+

Unique features: B-

General buying experience/observations: The produce department was located near the back of the store, in the old style. While brimming with a wide range of items, it was functional, if a little disorganized. Shelves were well stocked, with some vegetables looking a bit tired. Informative signage pointed out promotional items and competitive pricing.

There was a great deal of traffic in the store, but no associates in the produce section. After a few minutes, a clerk came out from the back to hose down the weary asparagus. He immediately approached me and asked if I needed anything. I asked him about baby watermelon — again there wasn’t any — but he pointed me to shrink-wrapped watermelon quarters. He asked if I’d noticed the great deal on grapes — 99¢/pound. He offered me a sample from the large display of green seedless grapes. He correctly identified them as Chilean and added, “Some people think they taste different from fruit grown in the U.S., but I don’t think you can really tell. It has more to do with the part of the season. Right now it’s still sort of early for Chilean grapes, so they are not a sweet as they will get later.” Bingo.

He helped me pick a good bag. At the checkout, the grapes rang up at $2.99/pound because I don’t have a loyalty card at this store.

STORE 3

Small neighborhood chain store in the same community as store #2. This store caters more to busy folks swinging in for essentials than people on their weekly shopping trips.

When visited: 1:30 pm, Saturday

Cleanliness: B+

Merchandising: B

Consumer information: B+

Breadth of selection: B

Price: A- (range of expensive to value items)

Availability of personnel: A

Knowledge of personnel: B+

Unique features: BGeneral buying experience/observations: The produce department was well lit and welcoming. While quite small, the design made the most of the space, with tall, well-stocked displays. Everything was fresh and neat, and rotation looked regular. Fruit could be found on the islands, veggies on the walls, and a nice range of organic items near the back. Due to the pressure of the space, certain items, like kiwifruit, were only sold in organics, while others, like mangoes, were only sold conventionally grown.

Two associates were stocking the department. I walked to the tomato display — a pile of pale beefsteaks, some robust tomatoes on the vine, Romas, and cherry tomatoes in clamshells.

A clerk grooming celery nearby asked if he could help. I told him I wanted tomatoes for soup and he suggested the beefsteaks. When I said they didn’t look ripe, he advised the tomatoes on the vine if I wanted to use them right away because they were riper (and more expensive, at $4.49/pound compared with the beefsteaks at $3.49).

I asked where I could find basil and he pointed out the pre-packed organic basil, $4.99 for 4 ounces. Another clerk overheard me saying I didn’t need that much and steered me to the display of fresh basil, helped me measure 1 ounce — cost 90¢ — and placed it into a plastic bag.

Near the basil were shallots. Or should I say shallot. I picked up the one lonely shallot — fortunately it was in pretty good shape — and added it to my cart.  pb