A question to retailers: How's your commitment to produce?

There’s some great commitment out there to having an outstanding fresh produce program — and then there’s not-so-great support.

“Summer’s over,” snapped my store manager. “Cut 30 hours out of your schedule starting next week.”

That, from a labor-only-focused store manager, was in the first week of September years ago when I was a produce manager at a busy inner-city store. The shortsighted store manager could not have been more mistaken.

First, summer doesn’t officially end until about the third week of the month. Further, summer fruit sales are still going strong well past this date. The availability of cut fruit, melons and grapes with late-summer Northwest fruit coming on strong, superb stone fruit, berries — along with local produce at its peak — all justify abundant displays with added sales. That’s not to mention that new crop potatoes, onions, apples and pears share in the sales bounty, along with an uptick of fresh bananas and more for back-to-school lunches.

Summer’s over? Not by a long shot.

Besides, cutting chunks of labor hours out of a produce operation, at this or any time of the year, is a sure way to suppress stock conditions and sales. That’s in addition to all the days in poorly managed stores in which produce clerks are routinely pulled out of the department to fill in as catch-up cashiers. Meanwhile, the produce department suffers.

The opposite scenario, of course, is having adequate dedicated labor hours, which translates into strong sales, along with the rich, gross-profit margins that result.

While some may think the produce department isn’t all that important, a retailer must be all-in on committing to fresh produce for many reasons, such as:

• Customers choose a primary grocer that sells the best produce — We’ve all heard it, seen it and experienced it. Walk into a clean store where the produce is consistently fresh with outstanding quality and is abundantly stocked, well signed, has attractive displays, samples, is competitively priced and staffed with well-trained, friendly and knowledgeable employees, and you can be assured that store and the chain are sure to do well.

• Great produce execution provides customers with the best shopping experience — Nothing equals the value of steady, repeat shoppers. It takes at least 10 times the cost and effort to attract new customers than it does to retain the ones you already have. Satisfied customers return over and over, but only if the produce department execution, accountability and high standards are a priority.

• Produce CTO, or contribution to overhead, is the highest of any department — On average, a grocer earns a range of 1 cent to 3 cents for every sale dollar. That means the perishable departments such as meat, deli and produce are key, as the gross profit and the resulting contribution to overhead are far stronger than what is generated with the low or break-even margin gained from dry groceries.

And fresh produce is the pack leader.

Companies that commit to high-quality, prominent and well-executed produce departments are foremost in consumers’ perception, and these chains also tend to be leaders in every way, especially with market share.

A great chain commits to procuring quality produce and setting high standards. Then it focuses on maintaining those standards by attracting and retaining long-term employees, paying competitive wages, having a well-formatted training program, emphasizing great customer service and promoting from within.

Once set, when a chain commits to produce by encouraging creativity, allowing at least some merchandising autonomy, what is the result? That chain will continue to grow produce sales, and with this it will find the coveted bottom-line results it seeks.

Don’t commit to a fresh produce program and, well, watch that market share erode — and then wonder why. After all, “summer’s over,” for far too many.
 
Armand Lobato works for the Idaho Potato Commission. His 40 years of experience in the produce business span a range of foodservice and retail positions.

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