Steve RamseyRecent history found CPG retailers attempting to stand out among competitors both within their channel and versus other channels by bringing differentiation to the perimeter of their stores. However, center store aisles represent an opportunity worth more than $440 billion, and it plays a very important role in serving the needs of today’s savvy shoppers. Manufacturers and retailers shouldn’t let efforts slip in this core area.
SymphonyIRI’s new Times & Trends report, “Center Store: Driving Growth from the Inside Out,” analyzes the climate of the center store departments, which include beauty care, beverages, general food, general merchandise, health care and home care. As marketers begin to reinstate emphasis on center store promotions, the report provides insights into what’s going on at the channel and category level to guide campaign activation for increased share and revenues.
I encourage you to download the full report, but here’s a glimpse into its content:
- Channel share shifts: Although high-level trends show that the center store performed better versus the industry average during the past couple years, unit sales varied drastically across measured channels. In convenience stores, unit sales increased 4.3 percent during 2012, while grocery and drug channels slid 3.0 and 3.6 percent, respectively.
- Category-level analysis: During the past year, unit sales climbed across only three of the 10 largest center store categories. However, these categories—coffee coffee, energy drinks and bottled water—are big wins for CPG marketers, as they are among the largest sales-generating CPG products across the multi-outlet and convenience (MULOC) landscape. This is more evidence that there’s momentum to be enjoyed in the center store thanks to launches of exciting and innovative brand extensions, with almost half of the 50 largest center store categories posting above-average unit sales within the same time frame.
- Promotional recommendations: Approximately four out of 10 center store categories experienced boosts in promotional support during the past year. However, as the report notes, it’s important to match campaigns to the needs of high-priority consumer segments and then closely monitor these campaigns to understand full impact on sales.
Center store differentiation is challenging, but not impossible. For retailers, a deep understanding of target shoppers should guide center store product selection and shelf space allocation. Meanwhile center store manufacturers can address conservative consumer attitudes and compete with perimeter innovation with products that support pervasive rituals and make it easier to live well on less.
What is your brand doing to promote center store items? Please share your tips and successes here, and check out other examples throughout the report.
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