Smallgoods has proven to be a highly resilient category with the pandemic driving retail sales, despite rising raw material costs creating higher shelf prices for many products.
“While we’re seeing decline versus FY20, the two-year growth numbers, particularly in pre-packaged ranges, remains impressive,” Don Smallgoods Head of Grocery Sales Greg Wooller says.
Pre-Covid, the total smallgoods category was undergoing a slow long-term shift in sales from the traditional deli to the pre-packaged offers in the dairy and deli express/barge point of purchases.
This was primarily being driven by time poor shoppers, 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’ve seen an acceleration in this shift of sales from the deli to pre-packaged offers,” he says.
“Off the back of concerns around social distancing (waiting at the deli) and a desire to shop faster (less exposure/risk), pre-pack smallgoods sales are now greater than the deli sales across the marketplace in both volume and value.”
Puopolo General Manager of Sales Rebecca Bremner has also observed the shift in demand from deli to packaged products.
“We’ve noticed a steady increase in sales of our retail/take home range,” she says. “Luckily we’d already started working on our set weight retail range before Covid-19 changed the buying habits of customers. Delis selling our larger salami and cured meats really noticed more customers preferring to grab and go, rather than stand around others and wait for staff to sliced smallgoods fresh.”
Another impact of Covid-19 on consumer behaviour has been the desire to indulge in feel-good at-home entertaining products, says Quality Food World CEO Erez Shahak.
“Eating in had to become the new eating out,” he says. “We saw from our own sales that we were hitting high sales figures throughout all the lockdowns. We’ve also noticed a move from the deli to pre-packaged smallgoods, as consumers seem to be after convenience, portion size and the ability to choose from an array of brands.”
Mr Wooller says deli smallgoods remain very important to many customers and still represent about 50 per cent of category value.
“We have, however, seen a long-term trend of prepacked smallgoods outgrowing delis across the market,” he says. “While deli offerings are available online with the major retailers, prepacked products seem better suited to the needs of online customers. With online in strong continued growth, this represents an opportunity for the category.”
For more on Deli & Smallgoods trends, check out the latest issue of Retail World.