How the closure of supermarket deli counters could affect fine food retailers

Leading supermarket Tesco has just announced the closure of all 317 of its in-store deli counters. This follows Sainsbury’s similar announcement at the end of 2020 that it would permanently close all 420 in-store counters including meat, fish and delicatessen.

Nick Gladding, senior UK retail analyst at IGD, explained that these closures were a result of an “accelerated decline in customer use of in-store counters” due to the pandemic. 

He added, “Improvements to the quality and merchandising of pre-packed deli lines means that fewer shoppers see the need to use a counter. At the same time, the expense of running counters, combined with the need to reduce costs to be more competitive, is prompting more large retailers to close them.”

A signal from consumers for better quality
So, can independent delis capitalise on this gap in the market left by supermarkets? And should they?

James Hardiman, senior retail analyst at the BRC, explained: “With some big supermarkets closing deli counters, there is an opportunity for independent delis and farm shops to capitalise on the potential gap in the market. The industry has always been incredibly effective at ensuring individual customer needs can be met by some resourceful retailer.”

This is reflected by Dezi Dalton, owner of Rye Deli, who insists: “The decrease in supermarket deli counters is a significant signal from consumers. Whilst supermarkets create deli counters they tend to be filled with generic, mass-produced offerings that merely create the ‘illusion’ of a deli counter. 

“Come to the independent Deli and that’s where you’ll find provenance, small-batch producers, quality, regionality and interesting offerings.  Supermarkets cannot offer this. The discerning consumer ‘has spoken’ by placing their purchasing with the independent deli where quality, knowledge and care is a defining characteristic. 

“Supermarkets across the spectrum are responding to this choice and thus the increasing closures of supermarket deli counters leaves the independent deli experts to continue to do what they do best. Trade gets stronger year on year. Customers come back loyally seeking and relying on the artisan produce sought from near and far but with the principles and practices that are meaningful to our consumers.”

Shopping for meat and dairy products at delis provides the opportunity to purchase these products in a more environmentally friendly way, as consumers can only buy the amount they need from top-quality ethical sources. And with conscious consumption on the rise, this group’s purchasing power is only going to grow – and fast, making delis and farm shops more important than ever.

More plant-based offerings?
As the demand for more ethical and sustainable food products grows, independent delis can also use mass deli counter closures as an opportunity to expand their plant-based offerings. Aside from being able to give customers the quality, knowledge and care they desire, providing these free-from products will also target customers who are reducing or eliminating meat from their diet due to environmental and health concerns.

Ana Purcaroiu, senior consumer analyst at GlobalData explained: “Consumers are shifting towards plant-based products, with 62%* of people surveyed by GlobalData actively trying to reduce red meat, or eat it in moderation— and 65% reporting the same for dairy. In this light, divesting deli counters certainly makes sense.

“People will increasingly base their choice of retailer on the availability of plant-based products, as GlobalData’s survey revealed that 21% of UK millennials claim that the availability of special dietary products is the most influential factor when deciding where to do their grocery shopping.

“Tesco has a growing number of high-quality items in its plant-based ranges—the Wicked Kitchen collection, for example—which should be in its favour. Perhaps Tesco could have kept the counters (and jobs!) open but tempted in the younger generations with vegetarian and vegan alternatives, or offered custom-weight meats and meat alternatives to their delivery and online offerings. Either way, striking the right balance is crucial when adapting to evolving trends.”

While the closure of supermarket deli counters sadly does mean the loss of thousands of jobs across the nation, it is undoubtedly a sign of the times and independent retailers can and should capitalise on the increased interest in conscious shopping.