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Cross Merchandising for Profit

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Cross-merchandising is fundamental to grabbing extra profit through increased impulse sales opportunities. Salad dressing in the produce case, stir-fry veggies in the meat case, wooden spoons for sale almost anywhere — all generate easy additional sales. The frozen food department, however, bears burdens most other departments do not face in cross-merchandising.

“Frozen is an extremely difficult category to cross-merchandise,” notes Neil Stern, partner, , a Chicago-based retail consultancy. “It is equipment-dependent, of course, and space is finite. The best examples almost always involve taking products out of their traditional home and bundling together with similar products, frozen or nonfrozen.”

What’s a frozen food category manager to do? Progressive Grocer asked several top grocers to give their opinions about cross-merchandising frozen foods and describe promotions they use for extra sales.

One popular way to cross-merchandise frozen items is alongside complementary frozen options. For stores that have the case or door space, this can be a successful venture. Joe Dortch of Virginia-based Ukrop’s Super Markets, says he makes cross-merchandising recommendations for frozen to his stores quite often.

“Within each weekly merchandising plan, I typically recommend that certain complementary frozen items be merchandised together,” Dortch says. “In most cases, by doing this, I am trying to recommend a quick meal solution to the customer. To me, this makes for an easier shopping experience and also provides the customer with some meal ideas that he or she may not have thought of before.” Ukrop’s operates 28 retail food stores, Joe’s Market (a regional specialty market) and a central bakery and kitchen.

Dortch thinks cross-merchandising frozen can be as strong as it is for any other department. He points out that in all cross-merchandising across the store, there is only a small percentage of customers that want, need or like both of the products being cross-merchandised. “My experience is that the same holds true in frozen,” he says. “This doesn’t mean you shouldn’t try to cross-merchandise, but I do think it means that you can’t expect massive sales lifts on both items just because they work well together.”

Vendors suggest cross-merchandising to Dortch “all the time,” he says. “The larger frozen companies, like , USA, are always recommending opportunities.”

These promotions are not only within their own brand portfolio, according to Dortch, but also with brands other than their own that would make a good match, such as Stouffer’s Lasagna and Brand X Garlic Bread. “Stouffer’s doesn’t own a garlic bread brand, but they think that if they display their lasagna with garlic bread, they will sell more.” Other companies, like Heinz, typically recommend displaying several of their brands together in a sort of “family event,” he explains. “It might be a display that shows all the frozen products available from Heinz that you might want to use to feed your family and may not have known existed.”

Pizza, dinners and entrees; frozen vegetables; garlic bread and the meal solutions category such as Bertolli all lend themselves to this type of promotion, says Dortch. “Plus ice cream — you’ve got to have dessert!” He believes frozen can be cross-merchandised year-round because no matter the season, customers are pressed for time.

“Cross-merchandising, hopefully, provides quick ideas and cuts down on preparation time for consumers,” he says.

Retail consultant Stern suggests taking the ends of freezer cases and creating solution-oriented areas. “Creating a Super Bowl theme of appetizers, pizza, etc. can be very effective,” he says.

Portable freezers provided by vendors would seem to be a perfect cross-merchandising vehicle. The portable cases are helpful when shelves can’t hold enough product during holidays and seasonal items are in and out, or can serve as end caps to tie into other departments, according to Dave Gaither of St. Louis-based Schnucks. He uses the freezers to cross-merchandise single-serve ice cream treats from frozen stations near checkout. Stern says spot freezers are also useful near the dairy department to create breakfast-themed promotions. Schnuck Markets, Inc. operates 105 stores, including five Logli stores, in Missouri, Illinois, Indiana, Wisconsin, Iowa, Tennessee and Mississippi.

Liability can be an issue with portable freezers.

Another option for cross-merchandising is bringing products from other departments into frozen. “A large percentage of the frozen aisle can be cross-merchandised with other departments,” says Chris Banta of Indianapolis-based Marsh Supermarkets. The regional Midwest food retailer operates over 100 stores throughout Indiana and Ohio.

Marsh works with vendors on cross-promotions, as do most supermarkets. “Heinz has an annual program that combines their grocery lines, like ketchup with Ore-Ida Potatoes and their line of frozen snack items,” notes Banta. The grocer uses cross-merchandising during Frozen Food Month in March, and the Heinz promotion in fall and the November/December holiday season. “Honestly, we try to make it work whenever possible if the tie-in can drive additional sales,” he says.