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- RESEARCH & AWARDS
Fresh perishables are becoming an increasingly potent supermarket differentiator.
Seeking to leverage growing shopper interest in health and wellness, taste and convenience—and to provide a distinct alternative to the traditional grocery and big box stores—more operators are giving greater merchandising emphasis to produce, prepared foods and proteins.
Perhaps the most prominent poster child for perishables marketing is Milwaukee-based Roundy’s Supermarkets Inc.’s new Mariano’s Fresh Market chain.
While the vast majority of Roundy’s approximately 160 outlets are traditional supermarkets that operate in Wisconsin and Minnesota under the Pick ’n Save, Copps Food Center, Metro Market and Rainbow Foods banners, the company last year entered the Chicago market with Mariano’s Fresh Market and its perishables focus.
The first Mariano’s opened in Arlington Heights, Ill., and two additional outlets were launched in 2011. A fourth store is planned for later this year.
Named after Robert Mariano, Roundy’s chairman and chief executive officer, the company reports that Mariano’s Fresh Market “is unlike any other store” and that it offers “the freshest high-quality foods from just about everywhere in the world” with “compelling” prices.
Indeed, Mariano’s Fresh Market has the appearance of two stores within a single building. In the Vernon Hills, Ill. location there is a vibrant fresh perishables section on one end, and traditional frozen, refrigerated and center store aisles on the other.
The perishables corridor features a large produce department, expansive bakery, hot food stations, service deli, sushi bar, seafood case and meat counter, and a host of self-service buffets.
Elements include a wood stone pizza oven; a rotisserie case containing whole chickens, baby back ribs, meatloaf and pork roast; an olive bar and fresh salad bar that are priced at $4.99 a pound; a hot soup bar with about a dozen varieties; and hot food bar selections that rotate daily for $5.99 a pound.
On Thursdays, for instance, the hot food bar has a “Taste of Mediterranean” theme with such selections as Baked Chicken Vesuvius, Chicken Teriyaki, Pasta and Sauce of the Day, Batter Fried Eggplant, Lasagna, Wisconsin Artisan Macaroni & Cheese, Sausage & Peppers, Chicken Tenders, Fried Chicken, Green Beans, Red Grains & Couscous, and Redskin Mashed Potatoes.
Other daily themes include “Far East Feast,” “Latin Fiesta,” “Backyard Barbecue,” “Famous Fish Fry,” and “Home Cooked Cooking.”
Indeed, such prepared foods are a key perishables focus.
The full-service deli counter—in an effort to compete with fast-food and fast-casual restaurants—offers $6 meals featuring an entrée and two side dishes that also are sold a la carte in the case.
Entrées include Chicken Milanese, Sicilian Meatballs, Roasted Salmon Filet Teriyaki, Grass-Fed Beef Meatloaf, Frenched Rack of Pork, Pulled Pork with Chicken Sweet Sauce, Herb Roasted Turkey Breast, and Italian-Style Grilled Chicken Breast.
Among the side dishes are Red Grains and Pearl Couscous, Vegetable Cake with Tomato Concassè, Ratatouille with Crumbled Goat Cheese, Roasted Yukon Gold Potatoes, Steamed Asparagus, BBQ Cajun Waffle Sweet Potatoes, Au Gratin Potatoes, BBQ Baked Beans, Redskin Mashed Potatoes, and Stuffed Shells Marinara.
The meals can be eaten at the outlet’s in-store dining section.
Steven Petusevsky, Roundy’s former director of culinary innovation, says he created the original foodservice program and prepared foods menu for Mariano’s with a balance of store-level kitchen-made recipes, commissary-produced items and signature dishes.
The goal, he notes, was to create points of distinction from traditional supermarkets.
All the selections were made from personal proprietary recipes that were distributed to select vendors for replication, Petusevsky reports.
Prepared items also are prominent in other perishables departments.
The full-service meat counter, for instance, contains a host of value-added selections.
They include Chicken Shish Kabobs, Beef on a Stick with Black Peppers, Stuffed Bell Peppers and Beef Pinwheels Greek Style.
There also are a host of boneless chicken breast recipes for $4.99 a pound: Cajun, Teriyaki, Sundried Tomato, Chicken Cordon Bleu, Stuffed Spinach Feta, Stuffed Asparagus Swiss, Lemon Garlic, and Italian Flavor.
David Livingston, managing partner at DJL Research, a Waukesha, Wis.-based supermarket site analysis firm, says such offerings are helping to position Mariano’s Fresh Market as an attractive alternative to traditional supermarkets, including the two largest chains in the Chicago area—Jewel-Osco and Dominick’s Finer Foods.
Jewel-Osco is operated by Eden Prairie, Minn.-based Supervalu Inc. Dominick’s is owned by Pleasanton, Calif.-based Safeway Inc. Robert Mariano is a former Dominick’s executive.
“Mariano’s enhances perishables much more than its major competitors which are plain, sterile, old grocery stores,” Livingston says. “While some retailers might do a better job then Mariano’s in specific areas, such as the salad bar or seafood department, none has better perishables as a whole. And Mariano’s is very price competitive.”
Still, while an attractive perishables department can serve as a powerful shopper magnet, it does not guarantee that visitors will do all their food shopping in the outlet.
Indeed, Ben Ball, senior vice president of Dechert-Hampe & Co., a Northbrook, Ill.-based sales and marketing consulting firm, says Mariano’s risks having consumers just stay within the perishables areas and not venture to other store departments.
During a recent weekday afternoon, for instance, the perishables areas of the Vernon Hills Marino’s were bustling with shoppers, while the remainder of the store—and particularly the frozen aisles—had sparse traffic.
“Outside of perishables, most of Mariano’s resembles Pick ’n Save [a traditional supermarket] and it even has the same private-label Roundy’s-branded items,” Ball says. “Even though there are huge gross margins in perishables, there also are high operating costs from shrink, labor, electronics and ingredients, which often results in net losses. The true profitability comes from the center store packaged goods items, such as soft drinks, snacks and bread.”
Wade Hanson, director of research and consulting for Technomic Inc., a Chicago-based foodservice consulting firm, agrees that minimizing waste remains a major operating challenge for perishables-oriented retailers.
That can be particularly burdensome for Mariano’s and other operators that carry large varieties of fresh foods.
Mariano’s reports, for instance, that it is merchandising more than 700 produce items that are sourced from across the country and world.
Among its offerings are 10 varieties of fresh mushrooms, peppers and tomatoes, 350 types of natural and organic yogurt, and 350 kinds of cheese.
“While variety is important and viewed as a positive by consumers, there is the delicate balance of giving customers what they want while also having the right product turn, which is tricky,” Hanson notes. “Carrying too many products and SKUs and trying to be all things to all people creates waste.”
Mariano’s Fresh Market At a Glance
Mariano’s Fresh Market
Roundy’s Supermarkets Inc.
Chief Executive Officer
Arlington Heights, Ill.,
Chicago, Ill., Vernon Hills, Ill.
Jewel-Osco, Dominick’s Finer Foods, Whole Foods
Pick ’n Save, Copps Food Center, Metro Market, Rainbow Foods