Fresh Food – Quality Over Price
A survey of 23,000 European shoppers in four countries, carried out by McKinsey, reveals grocers can boost sales by up to 10% in fresh fruit and vegetable departments. According to the survey, European consumers are inclined to judge the quality of the fresh-produce of a particular retailer, based on the qualities of their bananas and apples. When it comes to vegetables there is more of a variety in preference. British shoppers pay closer attention to the quality of a retailer’s potatoes, whilst the Germans favor tomatoes. The French tend to look at courgettes and the Swiss look at the lettuce.
The survey found that consumers are only happy with the fresh produce section of a very small number of retailers, in each of the four countries surveyed. This means that for most grocers in Europe there is a huge opportunity to improve their fresh fruit and vegetables departments and in turn create a bigger profit. The research also shows that in all four countries, the likelihood of a customer recommending a retailers fresh-produce department, depends of the quality of the produce. Other factors such as frequent promotions and low prices are also important, however, not as significant as quality. Quality improvements in this area are much cheaper and yield better returns than in store price reductions. According to McKinsey, quality-improvement programs in this department can increase sales by over 10% each year.
McKinsey’s research has shown that quality perception is usually influenced by less than ten products, which are called key quality items (KQIs). These items must be important to the customer, they pay very close attention to the item when they are shopping and know when the quality is good or bad. KQI’s are also bought by many customers when they shop in a store. Therefore, it makes sense for a retailer to prioritise key quality items for quality investments.
Retailers should look at their fresh fruit and vegetable department and do as much as they can to improve consumers perceptions of their produce. As well as increasing sales in this department, it will also have a knock-on effect on other aspects of the store. Quality improvements result in more consumer traffic, which also results in more sales in other departments in the store.