Customers want one thing from their grocery store: reliability.
Customers who choose your grocery store know they can trust you to have everything they need. From the dairy department to the produce department, your store provides the food people need to get through their week.
But to take your store to the next level, you must provide convenience, freshness, and variety.
That’s where adding a deli department comes into play.
Adding a deli in your grocery store turns it into a one-stop shop for many people and helps you build a loyal customer base, positively affecting your revenue. After all, no one wants to visit multiple stores just to complete a single grocery list.
In this blog, we’ll dive into the basics of opening a deli in a grocery store, discuss the profitability of doing so, and even share tips to boost your profits. With the right tools and technology, opening a deli may be easier than you think!
How Profitable Is a Deli in a Grocery Store?
As a small grocery store owner, you’re likely always looking for ways to boost your profit margins. You may be asking yourself how you can stand out from the competition. How can you set yourself apart from big grocery chains? What will make people spend more time in your store?
One answer to these questions is adding a deli to your grocery store. Many shoppers are looking for quick meal options, and fresh meats, cheeses, and prepared side dishes meet those needs.
Are delis in grocery stores profitable? Consider this statistic: The global chilled and deli foods market size was estimated at $224 billion in 2022 and is expected to grow to $370 billion by 2031.
There are many benefits to adding a deli in your grocery store, including:
- Increased foot traffic
- Increased revenue
- Attracting new customers
- Customer satisfaction
- Cross-selling opportunities
You can choose to offer harder-to-find, higher-end specialty meats, affordable lunch meats and cheeses, or both!
With these benefits in mind, let’s explore some of the considerations to keep in mind when implementing a deli in your grocery store.
Grocery Store Deli Considerations
Before opening your grocery store deli, you’ll need to take a few key considerations into account. First and foremost, your budget and costs.
Related Read: ANSWERED: How Much Does It Cost To Open a Deli?
Understanding the costs of opening and operating a deli is crucial to your success. What are some of the costs you need to keep in mind?
- Staffing
- Inventory
- Equipment (including slicers, deli scales, and display cases)
- Technology (including your point of sale system)
- Utilities
Some of these costs are upfront only, but many are ongoing costs you’ll need to consider as long as your deli is in operation.
The good news is that if you’re managing your deli properly, your costs will be more than offset by the revenue your new grocery store deli brings into your store. Some key areas to consider for your revenue streams are prepared foods, made-to-order sandwiches, specialty grab-and-go items, and meat sliced to order.
Factors Affecting Deli Profitability
Deli items often have higher profit margins than other grocery store departments. Why? The value-added nature of prepared foods and the perceived quality of fresh-sliced deli products allow for a bit more wiggle room in pricing. Still, several factors will impact your deli’s profitability.
Location and layout
Where do you plan to place your deli within your store? The answer will impact your profits and revenue. The best place for your deli is in a high-traffic area where it's easily visible and accessible to customers.
When setting up your store layout, you should also consider the flow of foot traffic. Is there enough space for customers to wait at the counter without feeling crowded? Can browsing customers see your deli from a distance? When you place your deli in the right spot, you can boost sales and keep customers feeling happy and comfortable shopping in your store.
Product quality and variety
As mentioned above, you can charge a bit more for your deli products because of the perceived quality of the items. But if you want to charge those higher prices… you guessed it, you need to have high-quality items worthy of that pricing model.
Top-tier meats, cheeses, and prepared foods can set your deli apart from competitors. But you need to consider more than quality — be sure to stock a wide variety of options. A diverse selection caters to a broader customer base and encourages repeat visits to try new things.
Pricing strategies
We’ve talked a lot about pricing, but it’s important enough that it deserves its own section here. You can charge higher prices for high-quality deli products, but you still need to remain competitive.
Take a look at the other delis and grocery stores in your area. What are they charging for similar products? Price your products in a way that is competitive enough to attract customers, but high enough to cover your costs and boost the profits of your grocery store as a whole. Don’t just “set and forget” your prices, either! Conduct regular pricing analyses to make sure you’re getting the best margins you can while staying competitive.
Operational efficiency
Last, if you want to maximize your profits, you need to make sure your operations are smooth and simple. What are some of the key elements of operational efficiency for a deli?
- Strong inventory management processes
- Food safety protocols
- Staff training for service, speed, and quality
When your deli runs efficiently, you can reduce waste, save on labor costs, and keep your customers happy. The right tools, like a strong deli point of sale system with baked-in inventory management, are critical in making your operations as efficient as possible.
Strategies To Boost Deli Profits
We’ve discussed some of the factors that impact profitability… but how can you make the most of these factors and drive your deli’s profit margins up? Let’s examine five key strategies you can use in your store.
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Optimize menu offerings: Regularly updating your menu based on customer preferences and seasonal trends is key to keeping profits high and maintaining customer interest. Pay close attention to side dishes and prepared meals, and analyze sales data to identify top-performing items (and under-performing ones).
Pro Tip: Lean into holidays and seasonal offerings! Prepare BBQ side dish packages for summer, or pre-made mac-and-cheese dishes at Thanksgiving. - Leverage technology: Implementing the right technology and tools is critical to your deli’s success. A point of sale system designed for markets and delis, like Markt POS, can streamline transactions, improve order accuracy, and provide valuable insights into your sales and customers. You also need strong inventory management tools to reduce waste and prevent stockouts. Additionally, consider integrating a deli scale with a printer to improve service speed and accuracy.
Pro Tip: Invest in an all-in-one point of sale system with inventory management and deli scale integrations! Having all your data in one place makes operations simpler and keeps your deli running smoothly. - Promotions and loyalty programs: Strategic promotions and well-designed loyalty programs are the key to higher sales and loyal customers. Start by implementing targeted promotions based on customer purchasing patterns and preferences. Use your customer data to offer targeted coupons that encourage return visits. Take things to the next level by implementing a loyalty program that rewards your best customers for continuing to shop with you.
Pro Tip: Consider using a customer loyalty software solution to manage these programs. A solution like Markt POS lets you track customer preferences and tailor your offerings accordingly. - Customer experience: An incredible customer experience is the ultimate key to attracting and retaining customers. If a customer gets the products they want, at the price they want, with the service and assistance they need, they will have no reason to shop somewhere else next time they need deli products. Focus on your deli’s customer experience by providing regular staff training and prioritizing convenience in your processes.
Pro Tip: Efficient checkout processes are crucial to the modern customer experience. Consider implementing technologies that streamline your checkout lines and keep customers happy. - Collaborate with local suppliers: Building strong relationships with local vendors can provide your deli with multiple benefits. Local suppliers often offer fresher, high-quality products, which are more appealing to your customers. Forming strong partnerships with these local businesses, farmers, and suppliers may also lead to better pricing or exclusive products, giving you a competitive edge.
Pro Tip: Supporting local businesses can also help you win more customer loyalty from shoppers who care about the popular “shop local” movement.
By implementing these strategies, you can streamline operations, boost profits, and make your customers happier.
Meet a Customer
Want to see how the right tools can make a difference in managing the deli in your grocery store? Let’s take a look at one of our customers, Market Al Fresca, and how the right tools set them up for success.
Market Al Fresca, an Italian market in Tewksbury, Massachusetts, has been serving customers since 2018 with a unique blend of imported Italian offerings and house-made prepared meals. The market prides itself on its scratch-made, ready-to-eat offerings.
When seeking a new point of sale system to meet their specific retail needs, Market Al Fresca chose our all-in-one tool. Manager Alyssa Nazaro highlighted several key factors that influenced their decision:
- Ease of use and multifunctionality
- Integration with Zebra scales for weighing produce and pre-made meals
- Comprehensive reporting and inventory management capabilities
Nazaro praised the system's intuitive design and minimal training requirements, stating, "The training was minimal. The system is very easy to use and intuitive. It was ridiculously easy."
With the right tools and technology in place, maximizing profits of your grocery store deli becomes far more possible! Check out more customer stories here to learn more!
Open a Deli in Your Grocery Store With Markt POS
As you’ve seen throughout this post, adding a deli to your grocery store can benefit your store by boosting profit and making your store more appealing to customers. We've explored the key considerations, from understanding cost structures and revenue streams to optimizing layout and product offerings.
The benefits are clear: increased foot traffic, higher customer satisfaction, and improved profit margins.
But if you want your deli to succeed, you need more than incredible products. You need efficient operations, smart inventory management, and speedy checkout processes. In other words, you need the right technology and tools.
Markt POS offers an all-in-one point of sale, inventory management, and customer management solution designed specifically for markets, delis, and grocery stores. Our system simplifies inventory tracking, enhances checkout speed, and helps maintain safety protocols, allowing you to focus on what matters most — serving your customers.
Ready to take your grocery store to the next level? Schedule a demo of Markt POS today and discover how our technology can help you open and operate a thriving deli department.
