While grocers in recent years have been focusing on perimeter departments (meat, produce, and fresh bakery) as the source for differentiation, the center store has returned to become the "heartbeat" of the store, according to a new study from SymphonyIRI Group.
"Consumers are turning to home-based eating and self-reliant health and beauty care to save money, and the center store has benefitted greatly from these consumer rituals," said Susan Viamari, editor of Times & Trends, SymphonyIRI, in a statement. "It's no surprise that competition is heating up, so differentiation will be the key to ongoing success. This is difficult in the center store, but it's not impossible."
Center store, which captures about two-thirds of CPG dollar sales and 70 percent of unit sales, has out-performed industry average during the past two years.
On the downside, the report found that only three of the largest center store categories — coffee, energy drinks and bottled water — showed unit sales gains during the past year. The declines for the remaining categories showed that consumers are "still entrenched in a conservative mode" despite some improvement in the economy, according to SymphonyIRI. Still, nearly one-half of the 50 largest center store categories posted above-average unit sales growth during the past year.
Other findings from the study:
"In the end, the winners in the battle for share of spending and loyalty in the center store will be those that provide superior products and a better, more relevant selection in the center store," added Ms. Viamari. "This means products that are tightly targeted against the needs of a retailer's shopper base. This will not only prevent customers from defecting to another retail banner, but it will also lure them into the center store and encourage them to buy products there versus competing perimeter department solutions."
How important is the center store when it comes to attracting and retaining customers for supermarket operators?