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Top-performing fresh retailers have top performing sales across the whole store, and grocers should be looking to their example of how to push perimeter excitement into center store.
“It’s about making that connection – you can’t look at products in isolation,” Sherry Frey, Nielsen’s SVP of product leadership, told PG during the Nielsen Consumer 360 Conference in Las Vegas.
To be sure, grocers need to be stripping away the traditional boundaries between departments to more effectively delivery the solutions that shoppers demand. As Frey demonstrated in her presentation at the IDDBA Expo earlier this month, numerous store categories possess inherent connectivity with others throughout the store to address many consumer need states.
Growth in the perimeter has been running around 6 percent over the last few years, versus 2 percent in center store, so stretching that halo is key to boosting storewide success. And fresh-centric stores over-index with younger multicultural shoppers.
“Retailers doing the best are connecting their entire store,” Frey said, noting the main growth areas for produce are in flavor, health and wellness, and convenience, including snacking formats and ready-to-cook items.
Among other perimeter departments, top-performing deli retailers are focusing on items such as chef-inspired destination dishes, salad bars and rice bowls, while lower performers stick to traditional staples like fried and rotisserie chicken.
Similarly, top-performing meat departments offer higher-end steaks and natural/organic chicken (vs. grinds and conventional chicken breasts), while top bakeries focus on artisan breads (vs. dinner rolls and doughnuts).
Frey said grocers needs to create a destination experience in the perimeter that includes meal solutions, interactivity and “food theater.”
Focus on health
Jordan Rost, Nielsen’s VP of U.S. consumer insights, noted the ongoing focus on health in light of emerging food labeling regulations.
“It’s really nothing new,” Rost told PG. “It’s part of the larger context of consumers leading the shift toward health and wellness. This shift is classic disruption.”
Consumers’ focus on health is rooted in several key motivations, among them the rising cost of health care, easy access to information and a desire to “own your health.”
Winning trends in grocery retail: fresh, natural and convenient, with biggest growth coming in categories including fresh meat, produce, value-added fruit and packaged salads. Meanwhile, declines are being seen in categories like milk, bacon, ready-to-eat cereal, soft drinks and processed lunchmeat.