- The supermarket’s center store is overdue for reinvention and reconfiguration, according to Mark Heckman Consulting. Key categories in the center store have experienced as much as 3-5% decreases in unit sales in the past five years, according to Nielsen data cited by Heckman.
- The center store is no longer conducive to the way people want to shop, according to Heckman. Looking at the center store from a shopper perspective, he says consumers dislike long aisles filled with too many hard-to-find items, and cluttered with shelf signs and POS materials.
- Industry observers commenting on Retail Wire generally agree that it’s time grocers take steps to improve the store layout and center store assortment in order to make shopping an easier and more enjoyable experience.
A riff on R.E.M. lyrics, “It’s the end of the center store as we know it,” rings true. The center store has indeed probably run its course — at least in its current state. While serving its purpose for decades, it’s increasingly becoming out-of-date and out-of-touch given the growth of online shopping options and consumer interest in shopping fresh and better-for-you perimeter departments.
Heckman, an industry consultant and former executive with Marsh Supermarkets, makes some valid points about how grocers can improve the store experience for shoppers — and likely improve store productivity and performance along with it. One way involves reallocating store space from routinely purchased center store canned, boxed and paper goods to perimeter offers.
As Retail Wire Braintrust member Richard J. George, Ph.D. and professor of food marketing commented, the center store represents 75% of total store sales but generates just 50% of profits. Furthermore, he says that customers only spend 18% of their time interacting with products there. So while center store categories indeed serve as traffic-drivers and basket-builders, they aren't margin-makers or profit-enhancers. Overall, slowing center store sales have plagued retailers in recent years.
Retailers continue to grapple with finding the right balance between fast-growing fresh products and packaged goods. Some are adapting by investing more in bakery, produce, deli and prepared meals, and they're building out their fresh departments. Retailers like Mariano's in Chicago, meanwhile, are beginning to shrink their center store aisles.
Another change Heckman recommends is a deeper integration of online and offline shopping. Grocery shopping is increasingly going online — but retailers still have to figure out how to balance that growth with shoppers' desire to still visit stores. One way grocers can do this is by reducing in-store inventory and space taken up by routinely purchased and oftentimes big and bulky center store items (what Heckman calls "scheduled consumption") — think paper towels, bathroom tissue, bottled water, pet food and diapers, among others. Retailers can encourage shoppers to buy these categories online for home delivery or through the stores’ click-and-collect services. Alternatively, grocers can actually install order kiosks inside the store and carve out more backroom space in which to house inventory for product pickup.
Moving big, bulky items out of the center store aisles also could increase some key store productivity metrics, like sales per square feet. It also could reduce store costs associated with product handling and stocking shelves, perhaps making store management and staff scheduling a bit easier and less costly. Then again, more attention paid to perimeter departments usually translates to additional and more experienced (read: expensive) labor, including butchers, bakers and chefs.
While realigning the center store — and really the entire grocery store — sounds like a good idea in theory, it’s an entirely different matter convincing grocers to make radical changes. After all, they don’t want to risk alienating or confusing shoppers. And public companies have many stakeholders to consider. Remaking center store may be a matter of taking baby steps: testing new layouts, reconfigurations, fewer SKUs, more in-store technology on a limited trial basis to learn what works and what doesn’t, and gauging consumer acceptance and response to any respective changes.