Woolworths, Coles: Deli counters disappearing from some stores
A key area of the supermarket we’ve all got used to is vanishing in some stores and while it’ll save retailers a motza it could end up costing you.
Lined up along one side of the fresh food department at the Woolworths store in Green Square, a suburb nestled halfway between Sydney’s CBD and the airport, is a wall of fridges.
They are filled with packs of Primo ham, tubs of olives and Tassal salmon.
But look closer; the cabinets are hiding something. Behind the wall of cheese and meats is the old manned deli counter. Still visible is the tiled white walls and spotless metal benches where fistfuls of honey roast ham or slabs of feta, all portioned exactly to the customer’s wishes, were once weighed and wrapped.
It’s not a one off. News.com.au has visited at least three Sydney Woolworths stores where, in recent months, the deli counter has disappeared completely or simply been cleared of stock and left empty.
A number of stores in Brisbane have also been shorn of the supermarket staple while Coles too has removed counters from some supermarkets.
High running costs are “killing” them off, said a retail watcher.
A union official said ditching delis was all about saving money. For the stores, but not necessarily for the shoppers. The lack of delis could see customers paying more at the checkout.
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Woolworths and Coles have insisted that staffed counters will remain in most supermarkets. However, they concede that in some stores delis are being pulled out. These are often in smaller or less profitable branches or those where fewer customers have used the service. Three Woolworths stores in inner Sydney – in Chippendale and Haymarket as well as Green Square – have lost their counters within just the last few months. In Brisbane, the Kelvin Grove store also had its deli ditched.
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All of those stores have things in common. They are in suburbs heavy with apartment blocks and the store has been, or is in the process of, being converted to Woolworths’ smaller-format “Metro” branding.
If you’re not familiar with Metro, they are new style Woolies that have rolled out in Sydney, Melbourne, Brisbane and Canberra. In the early days, they were almost all only a few aisles in size with a focus on food to go or for that night, such as sandwiches, salads, fresh food and ready meals.
Lately, Woolies’ has begun converting some standard sized existing stores to the Metro brand too. While almost all have gained a coffee shop in the conversion, many are now lacking a deli.
Some Coles stores have also lost the manned counter but most of these continue to trade under simply the Coles banner.
COSTS ‘KILLING” DELIS
Queensland University of Technology retail lecturer Professor Gary Mortimer said the trend for yanking out delis was already well underway in the UK and had now spread to Australia.
“It’s wage costs and waste that will kill deli departments. Across most supermarket departments, wages amount to run at about 8-10 per cent of sales, but in deli counters it’s 20-25 per cent of sales,” he told news.com.au.
“It takes a lot of staff to set up the case, shave the meat, put out the barbecue chickens, cut the cheese and fill the olives.
“And if you start shaving a piece of meat you really only have 24 hours before it gets dry and is thrown out but if its pre packed it can sit on the shelf for weeks. Also with pre packed food you don’t need skilled labour – any night fill person can put cabana and bacon on a shelf but you need a level of training to be in the deli
“There is not a lot of margin in the deli so they can be really tough to run at a profit.”
Prof Mortimer noted some stores that were losing delis were in suburbs that have seen scores of units go up. Apartment dwellers may be a demographic that no longer sees meat, fish and cheese counters as a must have.
“Removing delis may disenfranchise some shoppers but the retailers might accept that if they feel the majority will be fine.”
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DELIS OFTEN CHEAPER
Delis might cost more to run, but the food within them is often cheaper than the prepacked alternatives.
Pre-packed Tassel Australian skin on salmon fillets cost $38 per kg at Sydney Woolworths Metro stores but similar Australian salmon fresh from the fish counter is just $29.50 a kg.
Chicken breasts sold loose from the delicatessen are often around $9-10 a kilo; but can cost $12 a kilo from the meat fridge.
Plastic wrapped D’orsogna double smoked sliced ham is $32.50/kg; D’orsogna triple smoked ham from the deli is $22 per kilo.
Josh Cullinan is the Secretary of the Retail and Fast Food Workers Union (RFFWU), the smaller of the two unions representing supermarket staff.
“These employers will take any opportunity to cut costs and make savings,” he told news.com.au.
“Customers might want them but the destruction of manned delis is purely about cost savings.”
He said there were concerns for staff, particularly on casual contracts, could lose hours or their role altogether. Supermarkets have said that staff are redeployed within the store or to other delis close by, but Mr Cullinan feared that some of those employees might be pushed into more physical roles, such as stacking shelves, which they might be less suited to do.
Both Coles and Woolworths have introduced new enterprise bargaining agreements (EBAs) over the last year that have restored penalty rates adding hundreds of millions to supermarket bottom lines.
In an effort to trim costs Coles has cut head office staff, looked at streamlining in-store processes as well as cutting the number of delis. Woollies has looked to pare back the number of managers in stores and merge fresh food teams, according to the RFFWU.
Mr Cullinan acknowledged the impact the new costs were having the firms, “but, that said, these types of activities are always taking place”.
News.com.au contacted the Shop, Distributive and Allied Employees’ Association, the largest union for supermarket workers, for comment.
SUPERMARKETS’ RESPOND
Woolworths Metro General Manager Justin Nolan told news.com.au the company aimed to create “tailored” food stores for local shoppers.
“While around a third of our Metro stores contain a deli, we’ve seen limited take-up from customers in some of those. As a result we’ve made adjustments to the offer to better reflect the customer needs in that store.”
Nine Metro stores have deleted the deli in the last year.
“In some cases this has seen us convert an existing deli into a sushi bar, bakery or a cafe. In all cases these conversions have provided more space in the store and allowed us to increase the range of products for our customers.”
Mr Nolan said former deli staff would be reassigned to the coffee shop or bakery.
Coles said fewer stores now had delis but the counters would remain in bigger and busier stores where customers made more use of them.
“In a small number of stores where demand for an in-store deli is low, we have removed the servery and offered a similar range of pre-packaged seafood, sliced meats, cheese and antipasto in a variety of pack sizes.
“This self-serve option makes it easy for customers to grab a similar range of pre-packaged deli products without having to wait for team members to individually weigh and wrap their order.”
If one store lost a deli counter, one might remain in a store nearby as an alternative.
Prof Mortimer said losing delis would make supermarket shopping a more bland experience.
“You end up with a very homogenised store; where you want variety instead you see aisles and aisles of plastic covered pre packed food.
“But by doing this it could open opportunities for smaller bespoke players to open delis out the front of supermarkets.”
benedict.brook@news.com.au | @benedictbrook
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