Service in seafood: truth or fish tale? - Food & Consumables

DSN Retailing Today, April 21, 2003 by Mike Duff

Personal service is increasingly making its way to the cutting board in seafood departments as the pressures from labor costs, government regulation and competition are forcing mass market seafood retailers to develop more disciplined, focused operations.

Increasingly rare are seafood departments of the kind that emerged from the in-store expansion of the 1980s. For all but the most service-oriented food retailers, keeping extensive labor in the department at all times is cost prohibitive. New species are not the promotional vehicle they once were, and some major seafood retailers don't even stock species such as orange roughy--which exploded into popularity and was a must-have item a decade ago--at least not on a regular basis. Rather, the more constant virtues of a farmed species such as tilapia, including the greater consistency of price, have become attractive.

Given economic realities and the cycicality of food fashion, what's happening in seafood isn't surprising. Certainly, seafood remains a dynamic category, and with a new batch of studies revealing additional nutritional benefits from eating seafood, consumers have more incentive to consume fish.

Yet, seafood is subject to the trends in food retailing rather than setting them. Turning the situation to their advantage is a trick food retailers need to pull off.

At Wal-Mart, close monitoring of consumer data has led the retailer to develop a focused selection of popular products based on factors including velocity, demographics and price. This is reflected in the service counter and the adjacent frozen case at Wal-Mart supercenters. At one such unit in Monroe, N.Y., the seafood assortment in frozen closely paralleled that in the service case.

The idea in frozen isn't to mirror the selection in the service counter, though, said Bruce Peterson, vp of food merchandising. Rather, what is in either display reflects consumer preferences as they play out on either side of the department. "We want to have a complete frozen assortment as well as the most popular fresh seafood," he said. In some cases, seafood in the frozen and fresh cases can be less similar than in others, depending on purchasing patterns.

As a distributor and retailer, Supervalu has a unique perspective on seafood retailing as it is evolving. Larry Daerr, meat/seafood merchandiser of Supervalu, noted that the seafood operation of old, based on the presence of one or more service counter employees, is changing, and more retailers are looking to provide maximum satisfaction with a reasonable labor cost. Of course, that equation can play out differently depending upon the overall goals of individual retailers and even individual stores. With regulations such as country of origin labeling and potentially broader Hazard Analysis and Critical Control Point implementation becoming considerations, seafood retailing will continue to be subject to evolutionary change for the next several years.

"Stores are looking at the logistics of a self service versus full service in new and existing stores," he said. "Labor is very difficult to find and expensive. Many stores choose the self service with a twist . The department is self service with a manager on staff that prepares the product for the case, answers questions and maintains the cases. These departments usually have expanded frozen cases with a large variety of products: fresh frozen filets, upscale breaded products and home meal replacement items. The fresh cases are clean and well maintained with fresh seafood in clean appealing packaging. The appeal of this to the store is that you are in business 24 hours a day and with less labor costs."

Controlling labor costs isn't the only motivation in updating seafood operations. Differentiation is an urgent concern in today's intensely competitive food retailing environment.

"Most companies are expanding their private label bagged filets, shrimp and entrees. This fits right in with the self-service concept," Daerr said.

For some food retailers, differentiation remains a critical enough issue that they are still willing to absorb the labor costs required to keep service operations going full time.

Although Kmart experimented with self-service seafood in its in-the-box supercenters, it has committed to service operations in its remaining supercenters.

"You have the stores that have the full-service departments that want to offer their customers that extra-special experience when they shop for seafood," said Daerr. "These stores are staffed with knowledgeable managers and employees who not only sell seafood, but form a bond of trust with customers for advice on cooking and suggestions or meals. These stores are usually in the high-end store servicing more affluent areas where cost is not an issue and in heavily ethnic areas where seafood is a staple in the diet and volume makes up for the lower prices."

Even warehouse club chains have more focused everyday seafood selections. However, they have developed their particular promotional vehicles, grand opening galas and road shows, into a kind of art form that has helped to keep them formidable. Store openings typically highlight at least some of the seafood products that clubs have been able to sell successfully, such as crab legs and lobster tails. Road shows usually are more elaborate and while they have their focal points, including salmon and shrimp, they offer clubs the opportunity to experiment. Indeed, road shows are critical testing vehicles and give clubs a solid idea about member response to new products. They also solidify the position of clubs as leaders in providing both fresh and frozen product at sharp prices and, thus, as a destination for enthusiasts.