It generally takes at least 250 customers per day to support a profitable, full-service deli department. As an interim step, many retailers offer grab-and-go sections. By starting here and learning the basics of foodservice (a business much different than retailing), the savvy retailer can gauge the appetite customers really have for these products and how to make a profit offering them.
The investment required for a kitchen and cases to prepare and display grab-and-go products is substantially less than what's needed for a full-service program. And by creating the grab-and-go section first, it will be easier to properly gauge your future sales.
The Menu Of Your Dreams
Maybe people I know have work-related dreams. I am no exception. I had one of the more bizarre ones just the other night. I walked into the kitchen of one of my New England clients. Sitting at a prep table were the two chefs. Both were crisply dressed in white jackets and brand-new toques. On the table between them was a Ouija board, their fingers spread evenly across the moving piece. When I asked what they were doing, one replied, "We are deciding what to make today." Needless to say, I awoke in a cold sweat.
The dream made me realize many deli chefs decide what, and maybe more importantly, how much, to make on the fly. Using this system can result in the deli shelves less fully stocked than they should be for many hours of the day. What other store departments would allow such inventory gaps? Probably none.
To keep your foodservice shelves brimming with delectable choices, you must plan days before. To optimize those sales and create profit, you should track sales daily. Many successful retailers use a weekly production worksheet.
Optimally, you should create a sheet for each category, including sandwiches, salads, soups, entrees, dips and spreads. Pars (as in golf) should be developed for each item depending on how they are displayed in the shelf set. The shelf life of each product should be marked on the label with the "best if used by" date. Inventory should be taken at the end of every day. Once the count is complete, the deli supervisor can create an order for the department to produce the next day.
In the morning, your cooks can prepare products for the case immediately, especially if you have done your prep work the previous day. Having the tuna, tofu and chicken salads prepared, the cheeses and deli meats sliced, and the veggies cleaned and ready will help you get the finished products on the shelves early. Having soups and spreads ready allows you to fill the deli containers whenever the shelf supply dictates. Putting up a pot of garbanzo beans to make hummus when you are already out of it results in empty spaces and lost sales. You should aim to have your shelves filled by 10 a.m., earlier if you have customers who buy lunch items to take to work. Offer a good variety of products until closing time.
Unlike soups, entrees, salads and spreads that can have a shelf life of several days, freshly made sandwiches only last a day. They should be made in the morning, and given to the food bank or to employees the next day. Your customers should not be allowed to purchase sandwiches with bread that has had mayonnaise soaking through it for 30 hours, wilted lettuce or soggy tomatoes.
One of the questions I ask foodservice managers is: "Assuming that you make 10 different kinds of sandwiches each day, say, six of each, how many would you like to be leftover the next day?" The most common answer is zero, because it would be great to sell everything you make. In reality, the answer is 10, one of each kind. The problem with selling them all is you have no idea what time you ran out of tuna fish sandwiches. Was it at noon? Two o'clock? 7:30 p.m.?
When you have one of each kind left, then every customer who wanted one got one. Strive for this scenario. It is easily more profitable to make 10 sandwiches and sell eight than it is to make four sandwiches and sell them all.
Tracking Your Growth
The benefit of using a weekly tracking sheet versus a daily one is you can react to what you learn every day. Take the smoked turkey sandwich in the chart above as an example. Let's assume your sandwiches have a one-day shelf life, and you start each day with zero in stock. After two days of making six each (Monday and Tuesday) it seems simple enough to up the production to eight on Wednesday. Reviewing the week, by Friday, you would be making 10. The production is cut back on Saturday and Sunday because weekend deli sandwich sales are slower. A daily tracking sheet will not show you this valuable information.
The turkey and ham sandwich example shows the reverse also holds true. By responding to up-to-the-minute information, you can make fewer of this sandwich and reduce your shrink. Save the sheets for several weeks and look for patterns. You may notice particular items sell better on Monday and Tuesday than the rest of the week. Take advantage of this by making the right number.
Grab-and-go is not only about sandwiches and salads. Soup is one of the best-selling items in natural product stores. It is also one of the highest profit items in foodservice. If you sell hot soup every day, prepare enough to sell containers of the same soup in your deli case for the next few days. It takes about the same amount of time to make two gallons as it does to make five. The greater your variety of soups, the more you will sell. If two of your soups are continually the best sellers, be sure they are available to your grab-and-go customers every day.
A dependable foodservice department can increase sales throughout the store. Single beverage, produce items, chips and snacks sales benefit from the increased traffic in your foodservice department.
As your deli customer counts and sales stabilize, you'll enjoy the profit this area can produce. When you establish a solid increase in those numbers, you can position yourself for a smooth transition into a full-service department.
My grandfather always told me, "Slow and steady wins the race."
Steve Rosen is the owner of Rosen Enterprises, a natural products consulting company based in Hollywood, Fla. You can reach him at 954.967.8800 or [email protected].
Natural Foods Merchandiser volume XXIV/number 3/p. 80
Natural Foods Merchandiser volume XXIV/number 3/p. 80