“Got your turkey yet?” I know, a bit early for some of us. But it’s never too early to discuss the state of retailing in America, particularly as it applies to that one-time bastion of food sales, the supermarket. Today, supermarkets aren’t necessarily the one-stop shop they used to be. People’s shopping habits — similar to work and lifestyle norms — have evolved and changed.
Hey, I can speak to this with some authority since I’m the food shopper in my family. And a typical food shopping day for Bernie, such as Saturday, involves going to a produce and fruit superstore that has excellent prices, a quick stop to a Polish deli, a wine and spirits chain store (“A day without wine is like a day without sunshine”) and then a supermarket. Occasionally that changes when I visit a wholesale club store, but that’s typically the norm.
Moreover, it’s no coincidence that the supermarket is the last stop on my route; sometimes there are things I need that I just can’t get anywhere else. Of course, the supermarket still reigns supreme during the week for fill-in store items; you know, anything from lunch meat, bread and creamer to dishwashing soap, paper towels and toilet paper.
As many of you know, there’s been plenty of discussion regarding the demise of the cookie-cutter supermarket, prompting the rise of independent supermarket operations. These grocers make it a point to specifically cater to their demographic, thus carrying large ethnic food sections, more prepared foods and expanded specialty departments, such as seafood, bread and desserts, wines and spirits, even sit-down restaurants that grill steak and fish purchased at the store.
As you can deduce, most of this activity is occurring at the perimeter of the store, not the center. In fact, the center of the store has often been referred to as a “dead zone.” But wait, isn’t that where the candy aisle is? How can candy be merchandized in a dead zone?
You’d think that one of the most beloved treats should get better billing. Indeed, it should. Just check out the candy aisles in Europe. But there’s still time to revive the center of the store here in the United States, and with that the candy aisle.
Consider the latest report from Nielsen: Reinvigorating the Center of the Store. As author Carman Alison, v.p. of consumer insights for Nielsen North America explains, “We often hear that the center of store is dead or isn’t growing (especially as consumers shift their dollars to perimeter areas.) However, the demise of center of store may be grossly overstated. Within this new report, Nielsen data shows that center of store is still contributing to growth. The question then is — why and how? Today’s consumers are changing how they eat and also changing how they shop which is impacting center of store trends. Over the past five years, the center of store has actually brought in an additional $31.5 billion in sales. The compounded annual growth rate is +2.2 percent. While not growing as fast as perimeter, the growth is still occurring.”
And Alison has more stats to back up her assertions.For the 52 weeks ending Aug. 22, 2015, the center of store accounted for $709.4 billion in sales across the U.S., up $56.7 billion from 2011.
What were the key growth categories? Grocery, dairy and frozen posted combined annual growth rate increases of 2.4, 2.8 and 0.8 percent, respectively.
And within the actual food categories that are housed in the center of the store, there’s more positive news. Salty snacks posted a $4.75-billion gain during the four-year time frame, a 5.1 percent CAGR, which placed it first regarding growth. Candy came in third, eclipsed only by new age beverages, increasing sales by $3.12 billion, a 4.1 percent CAGR. And there’s one more segment that interests us, nuts. They grew by $1.3 billion, notching a 6 percent CAGR.
So what‘s driving this growth in the center of the store? Nielsen’s report provides some bullet points regarding those “drivers.”
- Where we eat: One common theme influencing trends is that consumers are redefining how we eat — whether it’s out of home or on the go — and our need for convenience and healthier options will continue to influence change.
- How we eat: Consumers are redefining how and when they eat, mealtimes are no longer static occasions that take place mainly in the home.
- Grazing is the new meal: In addition to meal solutions, we are also becoming a nation of grazers with 50 percent of us snacking as a meal replacement. And that’s where the center of the store is a primary beneficiary, accounting for 6 of the top 10 snacks
Just thought I’d bring this to your attention so you can bring it to the attention of your retailers. And mind you, don’t forget to get the turkey this weekend.