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Is fresh really profitable?

Analysts weigh in on the perks and pitfalls of fresh departments

It's not easy being green, and it's not easy making profits from green, either. Analysts have recently been dissecting the pros and cons of fresh categories, and the consensus seems to be that while fresh departments can help grocers differentiate themselves, these departments won't be profitable. A story by Global News includes input from CIBC analyst Perry Caicco and IGD program director Stewart Samuel. As Caicco points out, " are many myths surrounding the fresh revolution, not least of which is that fresh categories are more profitable than traditional grocery sections. Fresh departments--with everything going well--often generate about half the profitability of boring old grocery departments." Plus, grocers have to devote more labour into these departments, which can eat into returns. As Samuel says in the article, "There's not a magical wand that grocers can wave to suddenly sell more fresh and make more profits. They have to manage it and develop it with processes and methods behind it." To read the full story, click here.

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