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The center store represents about two-thirds of total consumer packaged goods sales and is a critical battleground for manufacturers and retailers alike.
Because the center store includes so many staples of the home, it would be safe to assume that unit and dollar volume has grown handsomely during the past three years as shoppers tried to save money by spending more time at home, turning to home beauty treatments and increasing use of over-the-counter medications for self-treatment purposes.
However, the current edition of Times & Trends, “Center Store: At Center Stage for Future CPG Success,” released by SymphonyIRI Group Inc., finds that the center store is much more complex. The report uncovers the multiple factors driving this complexity, explores sales and share trends, and recommends strategies to protect and grow this valuable piece of the CPG pie.
“The center store offers a wide range of very different products, so you can’t make an apples-to-apples comparison between trends in complex and distinctive center store segments, such as beauty care and carbonated beverages,” says John McIndoe, SymphonyIRI senior VP. “Increasing the complexity is the issue of private label and how it is reshaping the center store and lighting a fire under branded manufacturers, who are stepping up the intensity of their marketing game and getting results. The Times & Trends report looks at center store from various angles and finds new opportunities for manufacturers and retailers.”
The center store battleground is also continuing to evolve. For instance, in addition to the ongoing battle for share of food and beverage sales among grocery, mass merchandisers, supercenters and club stores, drug stores are turning up the heat and looking to make a splash. Walgreens is offering an increasingly expansive selection of center store products and is making the most of opportunities in underserved areas, such as “food deserts.”
“Too often, manufacturers and retailers devote time and resources to collecting critical information about shopper attitudes and behaviors and apply this information about past behaviors to future strategies,” says Susan Viamari, Times & Trends editor. “This is akin to fighting a new war with old weapons. Innovative manufacturers and retailers must study these past behaviors but also incorporate additional information, such as macroeconomic data, and harness predictive analytics to accurately forecast future shopper preferences.”
The report offers the following action items to manufacturers and retailers that are seeking to protect and grow share across the center store:
- Continually assess new growth opportunities and threats: Manufacturers should understand trip mix for their categories and brands, and ensure alignment with trip strategies of key retailer partners. In addition, they should assess potential share impact prior to and immediately following changes to pricing and promotional strategy. Retailers should align assortment, promotions and adjacencies with current and desired trip missions. They must also ensure adequate shelf space and optimal assortment across high-growth center store categories.
- Explore feasibility of collaborative marketing and merchandising plans: Manufacturers should work to secure optimal shelf space and placement by demonstrating category/brand value in building basket size and traffic. They should also merchandise and co-promote products with high purchase incidence in targeted trip types. Retailers should ensure assortment and store layout are reflective of purchase patterns associated with key trip missions. They should also look to provide affordable, multi-category solutions across categories/departments impacted by at-home and from-home rituals.
- Closely measure and monitor strategy execution: Manufacturers need to measure actual and projected sales growth in aggregate, across consumer segments and by store before and immediately following new product, pricing and merchandising strategy roll out. Retailers should carefully test pricing, promotion and merchandising changes prior to and immediately following program roll out, as well.
To download the report, visit: www.symphonyiri.com/Insights/Publications/TimesTrends/tabid/106/Default.aspx.
Chicago-based SymphonyIRI Group (formerly Information Resources Inc.) is the global leader in innovative solutions and services for driving revenue and profit growth in CPG, retail and health-care companies. SymphonyIRI helps companies create, plan and execute forward-looking, shopper-centric strategies across every level of the organization.