Though fresh and prepared foods have grabbed the spotlight these days, grocery retailers shouldn’t overlook the trip- and sales-driving capabilities of the center store, new research from Catalina shows.
In 2017, 99% of about 18 million shoppers at 6,658 U.S. grocery stores tracked made purchases from the center store, spending an average of $1,408 a year, according to Catalina’s “The Center Store Revolution: Innovation Drives Trips and Category Growth” study, released Wednesday.
The St. Petersburg, Fla.-based digital marketing specialist said 81% of all shopping baskets in 2017 had at least one center store item. Consumers, too, consistently frequent the center store. The department last year accounted for 60 annual trips per shopper, per store, down only one trip from 2016, according to the study.
“The center store is alive and well. Some eight in 10 baskets we looked at included a center store item,” Marta Cyhan, head of marketing for Catalina, said in a statement. “But many consumers are looking to discover something different. A new generation of brands and subcategories are reinvigorating the center store by appealing to lifestyle and ingredient-based preferences.”
For example, Catalina identified various cross-category consumer motivations — such as “Heart Healthy,” “Low-Fat,” “Trans-Fat Avoiders” and “GMO Avoiders” — that are spurring growth in certain product subcategories. Big winners include non-fat/low-fat ice cream, value-priced frozen dinners/entrées, sparkling/seltzer water, ready-made coffee drinks, window and glass cleaners, fresh rolls, dried meat snacks, vinegar, value-priced bath tissue and a range of snacks and candy.
Among those product segments, non-fat, low-fat and “lite” ice cream rose 66.9% year over year in dollar sales in 2017, while regular and premium ice cream dipped 3.3%. The average shopper spent an average of $21.37, compared with $56.76 for Heart Healthy shoppers, $52.19 for Trans-Fat Avoiders, $48.87 for Low-Fat shoppers and $46.99 for Natural Ingredient shoppers.
Another winning subcategory, sparkling/seltzer water, tallied a 14.9% gain in dollar sales and a 5.5% uptick in shopper trips. Customers spent an average of $17.71 in the product segment. But spending was much higher among consumers with health-focused preferences, led by Low Glycemic shoppers at $38.45 and followed by Heart Healthy shoppers ($35.17), Natural shoppers ($35.01), Paleo shoppers ($33.77) and GMO Avoiders ($29.48).
Catalina reported that expanded better-for-you options have lifted sales in the value-priced frozen dinners/entrées subcategory. Dollar sales jumped 32.9% and trips climbed 24.2% in 2017. Shoppers overall spent an average of $13.47 in the segment, compared with $19.25 for Heart Healthy customers.
“Our study demonstrates that brands and retailers who can understand today’s shoppers based on their underlying motivations and meet their evolving needs with product innovation will be a growth engine for the center store,” Cyhan noted. “The ability to engage the right shoppers based on ingredient-level targeting will help these brands efficiently grow their business.”
Other winning consumables categories included miscellaneous snacks (+11.8% in trips, +14.9% in dollars), ready-to-drink single-serve coffee (+15.5% in trips, +14.4% in dollars), breath freshener candy (+7.7% in trips, +6.8% in dollars), fresh rolls (+4.7% in trips, +5.1% in dollars) and vinegar (+3.5% in trips, +9% in dollars).
Some of the food and beverage categories experiencing trip and sales declines last year included cereal bars (-18% in trips, -19.4% in dollars), toaster pastries/tarts (-13.2% in trips, -11.1% in dollars), single-serve juice drinks (-9.2% in trips, -10% in dollars), granulated sugar (-5.9% in trips, -6.8% in dollars) and crackers/snack crackers (-5% in trips, -3.6% in dollars).
“Brand-building opportunities exist for CPGs nimble enough to successfully leverage the rapidly shifting buyer dynamics of center store aisles. In response to changing preferences, niche subcategories are seeing increases in trips,” the Center Store Revolution report said. “In fact, small CPG brands, below $1 billion in sales, are now the main drivers of new shoppers and new trips to the center store. Private-label products, like ready-to-drink coffee, are also boosting sales in former stronghold categories for big CPGs.”
Established and emerging food and beverage brands now winning over center-store shoppers, Catalina said, include Halo Top (ice cream), La Croix (sparkling water), Bragg Live Foods (apple cider vinegar), King’s Hawaiian (buns and rolls), Birds Eye (frozen vegetables and side dishes) and Campbell’s/Snyder’s-Lance (snacks).
“The upside for retailers is that they have a major opportunity to drive growth and trips when they continue to evolve and adapt to shopper demand through new and renewed subcategories — all fueled by shopper relevant innovations,” the study said.