$23B Missed Opportunity in Center Store: Study

$23B Missed Opportunity in Center Store: Study

PHOENIX — A newly released five-year Center Store study found that lost trips accounted for $23 billion of lost opportunity in the grocery channel. The study, unveiled at the Food Marketing Institute Midwinter Executive Conference here, said the industry needs to focus on shopper demand, as opposed to just category management, and leverage the total store, as opposed to just a single department or category.

PHOENIX — A newly released five-year Center Store study found that lost trips accounted for $23 billion of “lost opportunity” in the grocery channel.

The study, unveiled at the Food Marketing Institute Midwinter Executive Conference here, said the industry needs to focus on shopper demand, as opposed to just category management, and leverage the total store, as opposed to just a single department or category.

“We must put shopper demand at the front of the process,” said John Lewis, president and chief executive officer, Nielsen Consumer, North America. “And it can't just be about Center Store, but rather about the total store.”

According to the report, Center Store generates 73% of total store sales and 77% of profit, but Center Store growth is lower than for the perimeter.

The study also cited lost opportunities and profits in other retail channels.

“We must protect Center Store because dry grocery is the easiest business for others to get in,” said Dave Bornmann, vice president, grocery and nonfood, Publix Super Markets. “There are lots of competitors.”

Bornmann said Publix is working to enhance cross-merchandising between grocery and perishables, and is also collaborating more with suppliers.

“Manufacturers bring us a lot of consumer insights, and as retailers we need to embrace this,” Bornmann said, pointing to insights being incorporated into the Publix pet club program.

Frederick Morganthall, president, Harris Teeter, said a focus on meals can boost Center Store sales. “Meals are so important,” he said. “Having meal ideas on a customer's PDA as they travel home can make their job easier.”

Denise Morrison, executive vice president and chief operating officer, Campbell Soup Co., said initiatives can leverage both the in-store and online platforms.

“Maybe you devote a space in-store to taking a recipe the consumer finds online and translating it into a meal solutions display, along with the recipe,” she said. “This would make for a better experience for the meal preparer.”