How Technology Improves Value Store Produce Sections
September 21, 2023
Value store chains have been rapidly expanding, adding retail outlets and broadening food offerings to include fresh produce.
Being able to buy fruits and vegetables at a discount store comes with significant benefits for consumers. The produce often costs less, and these stores thrive in areas that are not served by a nearby supermarket or large grocery store, so-called “food deserts.” This is important because people in such areas otherwise have limited access to healthy foods and a nutritious diet is a pillar of good health.
However, maintaining quality can be challenging for discount retailers that have limited in-house expertise in selling produce, particularly at the distribution center and store levels. This is important because consumer surveys show that shoppers consider price, appearance and quality when purchasing fresh produce.
A Rapid Expansion
Dollar General is a good example of this changing landscape. According to a report by Coresight Research, Dollar General is the fastest-growing retailer in the country by store count. The company now has about 18,800 stores in the United States, compared to 5,000 in 2001. Other large value retailers, Dollar Tree and Family Dollar (which Dollar Tree acquired in 2015), together have more than 16,000 locations.
To lure shoppers, these value store giants have also been remodeling existing stores with more refrigeration units and expanded grocery offerings that include healthier foods. Dollar General has turned its attention to fresh produce, which is currently sold at more than 2,700 of its stores, and plans to offer it at more than 3,000 locations by the end of the year. Company executives have said that eventually, 10,000 Dollar Generals could sell fresh fruits and vegetables.
This is a big deal for producers and consumers of fresh fruits and vegetables. More than 1 in 5 consumers buy groceries at value stores, according to Coresight. There may be more shoppers turning from higher-priced retailers, the research indicates, if value stores continue to improve the quality of their fresh food while keeping prices low.
The Benefit to Consumers
A University of Las Vegas (UNLV) study quoted in Supermarket News concluded that value stores can be community assets that increase access to affordable, healthy foods. The study found that the term “value store” applies to produce too, with 84 percent of produce items costing much less.
According to the U.S. Department of Agriculture, an estimated 19 million people live in low-income areas that are more than one mile from the nearest supermarket or large grocery store for an urban area or greater than 10 miles for a rural area.
The expansion of value stores demonstrates their ability to cross socioeconomic divides. Dollar General has said that about 75 percent of the U.S. population lives within five miles of one of its stores.
And, according to the UNLV study, value stores’ diversification of offerings beyond their traditionally core products may help lower-income families bridge a nutrition gap. They can remove barriers to healthy eating that include cost, quality, and accessibility.
The Challenge of Produce
Because of the variability of weather and other production factors, the fresh fruit and vegetable industry has traditionally depended on the expertise of industry veterans to make decisions about product quality, pricing, and promotions. This is expertise that value stores may not have access to.
Meanwhile, all grocery retailers, both discount and traditional, are continuing to face significant worker shortages in their stores. The lack of experienced produce clerks, which became particularly evident during the pandemic, will be exacerbated by value stores selling more produce.
The produce knowledge and experience gap may be mitigated by value stores’ strategy of only carrying a limited assortment of products. While the typical grocery store may carry more than 200 fruits and vegetables, value stores may be limited to more shelf-stable offerings like bananas, potatoes onions and bagged salad mixes along with staples like and tomatoes, apples, citrus and grapes.
Limited product assortment and retail-ready packaging further reduces the need for experienced staff in the new produce departments.
Innovative Technology Solutions
Discount retailers can also address the availability of labor issues by relying on innovation and technology solutions that ensure that the produce delivered to the store consistently meets the company’s specific quality requirements.
Paradoxically, value stores may require higher quality produce because they often do not have the staff to set up displays and trim the lettuce, while the stores often may not have appropriate refrigerated display cases to maintain the quality of the produce.
At the same time, consistent quality from growers, packers and shippers will help these retailers to broaden their customer base beyond their traditional lower income demographic to a middle and even a higher-income customer who is looking for good prices and good value.
Technology can help. iFoodDS offers its Quality Insights solution to provide value stores important information to support the goal of giving consumers access to fresh produce no matter where they live.
iFoodDS technology can provide sophisticated quality solutions that allow retailers to offer better value on the fresh products shoppers care most about.