First quarter shows hint of retail challenges ahead - The Packer

First quarter shows hint of retail challenges ahead

06/26/2009 02:27:44 PM
Tom Karst

(UPDATED June 26) Help for produce department managers may be on the way in the form of a large Northwest bing cherry crop, but department performance in the first quarter was dragged down by deflationary trends and a weak economy, according to the Fresh Facts on Retail report issued by the United Fresh Research & Education Foundation.

Data from West Dundee, Ill.-based Perishables Group reveal first-quarter produce department sales were off 1.4% compared to the same period in 2008. Volume per store was down 3% compared with the first quarter last year and the average retail price was up just 1.7% compared to the same period.

Steve Lutz

Retail produce managers are under pressure to improve their performance, said Steve Lutz, Perishables Group vice president.

“Having deflation in your food dollars while generating less volume — that’s a problem,” he said.

The quarterly report is a joint effort of United Fresh, The Perishables Group and Coral Gables, Fla.-based Del Monte Fresh Produce NA.

The first quarter results continued a trend from 2008 that indicates retailer trouble in boosting volume and sales.

Cherry bump

Lutz said he anticipates retailers will receive a bump in cherry dollars this summer because this year’s crop is expected to be substantially larger than the 2008 crop.

Pears, grapes and berries also will be influential for retail performance this summer, he said.

Full production of cherries in Washington is anticipated by the week of June 29, said Roger Pepperl, marketing director of Stemilt Grower Inc., Wenatchee, Wash.

Roger Pepperl

“Retailers could sell twice as many cherries at 25% less of a retail price possibly but still ring the bell for volume and dollars,” Pepperl said.

Some retailers are moving to 3-pound and 4-pound consumer clamshell packages for cherries, he noted, looking to gain dollars from the larger packs to help boost their overall department sales, Pepperl said.

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