Exciting consumers about center-store

September 25, 2013

Fresh beats center-store on authentic flavors. CPG and retailers must address this issue to reinvigorate shelf-stable foods.

Many reasons exist for the sales growth challenges in supermarket center-store. These range from the store-created (such as difficulty navigating narrow aisles) to the CPG-created (such as processing that loads foods with sugars and sodium, and labels that are hard to read).

Supermarkets typically feel compelled to carry expansive center-store assortments, even though Quick Trips rule the day and people often want to eat healthier, fresher, local perishables.  So it doesn’t surprise that 50% of retailers told Supermarket News in a survey this spring that they’ve reallocated some center-store space to perimeter departments.  Also, to help achieve a projected 2% growth in center-store sales this year, 52.8% merchandise shelf-stable foods alongside fresh within perimeter departments.

To be blunt, The Lempert Report feels a major shortcoming of center-store is that its products don’t compete with fresh foods when it comes to flavor.  When is the last time you saw a jar of heirloom tomato sauce on the shelf, or meat ravioli made with angus beef in the frozen-foods display?  These are just two examples where center-store could improve—many more exist.  Overall, the most stimulating aspects of fresh foods haven’t been converted into center-store offerings.  Not surprisingly, consumer-spend flows to the perimeter, and packaged foods increasingly play a supporting role on meal tables across America.

Although retailers consider many ways they might reinvigorate center-store, there’s only one way that would make a significant difference, in our opinion:  better product formulations that capture more of the wholesome goodness and appeals of fresh foods.  This is mostly a challenge for CPG to rethink their lines, but retailers must step up too - both in pushing manufacturers to innovate with fresh in mind, and in developing private labels that truly differentiate with authentic tastes as close to fresh as possible.