Double Take

USPB Study confirms Potatoes Double Up Retailer Sales

Published in the November 2010 Issue Published online: Nov 06, 2010

To confirm the impact of fresh potato purchases on transaction averages, the USPB commissioned a new study to look at market baskets during the years 2008 and 2009. The study was conducted by Perishables Group using loyalty card data from two major supermarket chains (bi-coastal), and looked at the purchase transactions of over 200,000 households during the two-year study period. The findings the study reported were sensational. The impact of fresh potato purchases were even higher than the USPB had suspected-a whopping 216 percent increase in basket size during 2009, from $48 to $104. But the news got even better when looking at the purchases involving specific varieties. Red potatoes grew the average basket size to $108 (a 225-percent increase), and yellow potatoes increased the transaction average even further, to $115 (a 240-percent rise). But specialty potatoes topped them all-when specialty potatoes were included in the market basket, the grocer rang up an average sale of $129, a 269 percent increase compared to the average transaction.

The USPB also looked at items that were in the basket most often when potatoes were purchased and the change in incidence versus their presence in all baskets (i.e. with or without potatoes present). In the produce department, sweet potatoes are purchased alongside fresh potatoes almost four times more often than usual (index of 374), followed by onions, carrots and garlic, which all rang up more than two-and-a-half more times their norm. These findings point out the importance potatoes have in driving other produce purchases, and reinforce the strong potential they offer for cross-promotions within a retailer's produce department (such as "buy a bag of potatoes and get an onion FREE").

 

When looking at the meat department, beef may be present in the basket with potatoes more often than other meats (55.9 percent of potato baskets), but ham notched the greatest increase in purchase incidence at more than twice the usual rate (an index of 235). And the growing trend toward pairing potatoes with chicken is evident as fresh chicken was purchased during nearly one in every three potato transactions-almost twice the usual rate (193 index).

To confirm the impact of fresh potato purchases on transaction averages, the USPB commissioned a new study to look at market baskets during the years 2008 and 2009. The study was conducted by Perishables Group using loyalty card data from two major supermarket chains (bi-coastal), and looked at the purchase transactions of over 200,000 households during the two-year study period.

The findings the study reported were sensational. The impact of fresh potato purchases were even higher than the USPB had suspected-a whopping 216 percent increase in basket size during 2009, from $48 to $104. But the news got even better when looking at the purchases involving specific varieties. Red potatoes grew the average basket size to $108 (a 225-percent increase), and yellow potatoes increased the transaction average even further, to $115 (a 240-percent rise). But specialty potatoes topped them all-when specialty potatoes were included in the market basket, the grocer rang up an average sale of $129, a 269 percent increase compared to the average transaction.

Dairy products have long been seen as a natural complement to fresh potatoes, and, indeed, butter was included in 35 percent of baskets when potatoes were purchased-almost twice the norm (an index of 194). Sour cream, cheese and eggs also showed up in the basket at well above their usual rate of purchase, underscoring the opportunity retailers have in co-promoting dairy products with fresh potatoes.

Prepared, frozen and canned vegetables score at or near the top of the list of other grocery categories prominent in the basket when fresh potatoes are purchased. Along with other staples like canned beans, tuna, salad dressing and soup, these products serve as a reminder of the power of potatoes in building the grocer's transaction average and profits.

Fresh potatoes are a key to the success of every retailer's produce department-they are the No. 1 category in produce by volume, and rank as the third-largest vegetable category in dollar sales (Fresh Facts retail data, 52 weeks ending June 26). But the USPB study proves conclusively potatoes' impact reaches far beyond the produce section, as potatoes drive added sales around the entire grocery store when shoppers pick them up.

 

Check out the USPB's Resource Center (http://tinyurl.com/uspbresourcecenter) to download a copy of the USPB's most recent market basket study, or contact USPB Retail Marketing Consultant Don Ladhoff at don.ladhoff@uspotatoes.com with questions or for more information. 

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