Potatoes are the workhorse of the produce department, but they don’t often receive the attention they should from retailers. Potatoes are a staple in 88 percent of all households and are enjoyed by all demographics. However, with proper assortment and merchandising, retailers and growers could be enjoying even higher fresh potato sales. And since when potatoes are in a consumers’ basket, they spend on average $77 compared to only $42 when they are not, increasing potato sales will result in increased sales across the store. It is time to bring the all-inclusive, hardworking potato back into the spotlight.
Kantar Insights Consulting, an agency that helps create growth opportunities in the retail sector, conducted a shelving study and updated the Rich Mix Assortment Recommendations for Potatoes USA to show how this should be done. These studies were used to establish the best practices in merchandising of the fresh potato category at retail. The two studies were combined and define four categories that drive growth. These four categories are shelving placement, placement within produce, assortment and secondary locations. There are recommendations for all four that can lead to growth in potato sales.
Shelving placement is specifically related to the location of the produce department in the store and types of displays used for the potatoes. Potatoes performed best with the produce department being located in the right, front portion of the store (average growth of 8.7 percent). If potatoes are displayed in raised bins (ascending layers with the bottom level being the closest and lowest to the consumer), sales can grow on average by 4.1 percent. The easiest way to see growth with this commodity is with signage. Just by having a sign calling out the different potatoes on the shelf and the section, 2.9 percent average sales growth can occur.
The “placement within produce” recommendations dictate where potatoes perform best within the produce department. As stores remodel, these insights are the perfect opportunity for optimizing the location of potatoes. A 2.8 percent sales increase can happen if the potato section is placed in the back left section of the produce department. What would help further grow this category is having the right commodities located nearby. If the potato section is located across from apples, an average 4.7 percent lift in sales can occur. Among the most common items located next to potatoes are sweet potatoes, onions and squash. Unfortunately, all three of these contributed to a decline in potato sales. Squash caused the biggest decline (-9.5 percent) in potato sales when located next door. Placing potatoes in a stand-alone shelving unit should create the biggest growth by adding a 5.4 percent lift.
“Assortment” contains three improvements that are easily achievable. Shelf organization can drive a 1.4 percent sales growth if done correctly. Placing potatoes on the shelf by bulk and packaged helps grow this category. If optimizing the shelf vertically, smaller packaged potatoes should be at the top, while larger bags and bulk should be at the bottom. Vertically blocking the shelf can lead to a 3.8 percent sales growth. Flow can lead to a growth rate of 5.7 percent on average. Retailers can optimize flow by merchandising potatoes on the shelf in this order, with the designated amount for each: white (12 percent), yellow (21 percent), russet (44 percent), purple (11 percent) and red (12 percent).
Secondary locations can help increase potato sales by implementing two specific steps. Setting these types of displays on an end cap can increase potato sales by 2.2 percent. Since these locations are highly visible, it is no surprise that these are great spots to feature spuds. If potato secondaries are set up, locating them next to onions will increase sales by 4.1 percent. Like main potato sections, secondaries located next to sweet potatoes bring down potato sales by 3.7 percent.
Grocery retail has become exceedingly competitive over the last two years. As retailers strive to advance, they are looking more closely at the products they carry and the companies that provide them. According to Progressive Grocer’s annual report for 2017, produce and meat were tied as the two most influential areas of the store for driving future growth. On average, 21 percent of consumers say the produce department defines their retail experience. It is the produce department that differentiates retailers from their competitors. In fact, produce is the most successful department in generating sales according to the same report, with 65.7 percent of people purchasing an item when they visit the department. As we move forward in this competitive environment, it is important we continue to help retailers improve sales of the fresh potato category.
Reach out to Kayla Dome at retail@potatoesusa.com to receive the six-page handout brochure that highlights these potato merchandising recommendations or for a copy of the full study.