Three-quarters of grocery retailers surveyed for the Supermarket News Center Store Trends Report say they expect unit sales in center store in 2021 to remain the same or increase compared to 2020 — with 40% anticipating unit sales increases of more than 5%.
Eighty percent of retailers expect center store sales to remain the same or increase this year. A full 20% of retailers anticipate dollar sales increases of more than 10%, while 24% expect increases of 5% to 10% and another 21% expect increases of 2% to 4.9%.
Nearly half (45%) of retailers say that the coronavirus pandemic has led to increased sales of more than 10% in center store, with 18% seeing increased sales of 5% to 9.9% and 19% with increased sales of 0 to 4.9%. Only 17% of retailers say they experienced sales decreases in center store due to the pandemic.
The top-selling center store categories during COVID have shifted since our 2020 study. The same three categories rank in the top three, but the order has changed and their numbers have dropped. In 2021, shelf-stable food/grocery, household cleaners and paper goods landed in a virtual tie with 56% to 57% of retailers citing those as biggest-selling categories in center store.
Nearly half of retailers surveyed (48%) named at-home delivery and curbside pickup as a way to increase center store sales, followed closely by new product innovation and cross-merchandising shelf-stable products with complementary fresh foods in the store’s perimeter (40%).
Nearly half (45%) of retailers surveyed say that online retailers have been the biggest threat to center store sales, followed by the direct-to-consumer channels (19%), Walmart (11%) and dollar stores (10%), which continue to chip away at the grocery segment.
Grocers are fairly split on the best ways to combat the competition, with survey respondents suggesting more competitive pricing (25%), delivery or curbside pickup (22%), offering more specialty products (20%) and increased or enhanced private brands (15%).
Center store products continue to grow real estate within the store, with 55% of retailers saying they have a larger presence in the perimeter departments than in years past.
For a variety of reasons, private label continues to grow in center store — value, improved quality and assortment of private brands, customers’ willingness to experiment with different brands, out-of-stocks for leading manufacturer brands, and so on. Among retailers surveyed, more than half (51%) say that compared to this time last year, private label makes up more of consumers’ shopping baskets.
Two key areas where retailers plan to build up their private label offerings over the next 12 months are with new product innovations (50%) and natural/organic products (47%). Other planned enhancements to private brand programs include specialty products such as gluten-free and plant-based (29%), multicultural products (25%) and healthy reformulations of existing products (19%).
Health & wellness continues to be a growth category for center store. Retailers are looking to boost those sales through new products (43%), nutrition labels/shelf tags (40%), growing/updating their wellness assortment (35%) and health-oriented initiatives such as enhanced pharmacy services (15%), in-store clinics (10%) and nutrition and exercise programs (9%), all of which can help drive customers to the health & wellness products in center store.