CHICAGO — Revamping the center store could present an opportunity worth more than $440 billion for supermarkets, according to a new study by SymphonyIRI.
As retailers have sought to bring differentiation to their stores, they have focused on perimeter departments — such as meat, produce and the bakery — while placing less emphasis on the center store. But the IRI study, "Center Store: Driving Growth from the Inside Out," indicated that center store departments today are playing a central role in serving consumer packaged good shoppers, capturing nearly two-thirds of CPG dollars and 70% of unit sales.
"The center store has truly become the heartbeat of the store," SyphonyIRI Group editor of Times & Trends Susan Viamari said. "Consumers are turning to home-based eating and self-reliant and beauty care to save money, and the center store has benefitted greatly from these consumer rituals. It's no surprise that competition is heating up, so differentiation will be the key to ongoing success."
According to an analysis of center-store departments, grocers and convenience stores controlled a combined 69% share of beverage sales, but convenience stores' share has climbed by nearly 1% compared with grocery stores. Meanwhile, grocers control 54% of general food sales, but that share declined in the last year as mass merchandisers, club retailers and convenience stores increased their share.
Meanwhile, the drug channel saw center-store sales decline, thought not as sharply as grocery stores, with the sharpest losses coming from the health and beauty aisles.
Across 3-of-the-10 largest center-store categories during the past year — coffee, energy drinks and bottled water — unit sales climbed. Meanwhile, merchandising support increased across 42% of center-store categories.