CHICAGO -- Branded destination departments, occasion-based marketing, innovative packaging, and a focus on health and wellness are among the ways retailers can build profits in Center Store.
It's critical that retailers take action to prevent Center Store sales from continuing to shift away from traditional grocers, said retailers and manufacturers during an educational session at the FMI Show, held here last week.
Retailer participants in the session, called "Solutions for Growth: Repositioning the Center Store," agreed the grocery department needs much more attention than it has been given.
"Over the years, the focus has been on the perimeter. The Center Store has been left in the back room," said Patrick Raybould, president, B&R Stores, Lincoln, Neb.
"We focus so much on the perimeter that the grocery aisle becomes just a maze of products," agreed William McEwan, president and chief executive officer, Sobeys, Stellarton, Nova Scotia.
Kevin Davis, president, chairman and CEO, Bristol Farms Markets, Carson, Calif., said the industry needs to figure out how to make the Center Store more exciting.
Manufacturers are just as concerned about the state of the grocery department. While the perimeter of the store has undergone dramatic changes and improvements, Center Store has remained stagnant.
"Center Store has been deprived of innovation, except that which enables operators to execute more efficiently," said Denise Morrison, president, global sales, Campbell Soup Co., Pittsburgh. "It has been operations-driven."
Morrison discussed several ways that retailers can use lifestyle marketing and other tools to build sales in the department.
Among Morrison's recommendations were: Support innovative products, such as Campbell's Soup at Hand (a sippable soup); integrate general merchandise with food (baby needs with snacks); and create branded departments.
Lifestyle marketing like this helps make shopping less of a chore and more of a pleasure, Morrison stated.
"It gives shoppers a reason to spend more time in the store," she said.
Davis of Bristol Farms agreed that differentiation is just as important in grocery as it is in fresh foods.
"We need to focus on different products, just like Trader Joe's and Whole Foods do," he said.
Morrison stressed the need for occasion-based marketing. She used Campbell's Tasty Tuesday as an example. Tasty Tuesday is a meal-solutions program that retailers like Fred Meyer have customized to fill a consumer need state.
Improved shelving is equally important. Morrison pointed to Campbell's "IQ Shelf Maximizer," a gravity-fed shelving system that organizes condensed-soup varieties for easy stocking and shopping.
Retailer participants in the panel said such tools help draw attention to Center Store. "Campbell's has some good equipment that helps consumers recognize their products," said Raybould of B&R Stores.
Along with Campbell's, other consumer packaged goods manufacturers are giving retailers new ways to add excitement to the mundane chore of grocery shopping.
Lance Friedmann, vice president, marketing strategy and development, Kraft Foods North America, Northfield, Ill., said health and wellness will be a major competitive driver in the years to come. This can be attributed to the aging baby boomer population and the obesity epidemic.
"Health and wellness will remain a defining trend over the next decade," Friedmann said, citing statistics showing that 64% of adults and 15% of kids are obese.
To tap into the health and wellness trend, Friedmann recommended that retailers focus on their core shoppers' need states. H.E. Butt Grocery Co., San Antonio, is doing just that, he observed.
Nearly 60% of H-E-B's core shoppers are Hispanic, and many of them have diabetes. The retailer markets to this group by promoting sugar-free groceries as part of diabetic promotions.
As for health and wellness merchandising options, Kraft research shows that about 90% of consumers expect to find weight management food in-aisle, rather than in a separate section or display. An exception to this expectation is natural and organic foods, along with nutrition bars and shakes.
Retailers also need to communicate health information at the shelf. Many are doing so through health-oriented shelf signs and logos on packaging.
Friedmann named Wegmans Food Markets, Rochester, N.Y., as an example. The retailer has begun using wellness logos on its store-brand line to delineate which products are low-fat, vegan, gluten-free, diabetic-friendly, or have other health attributes, he noted.
