CENTER STORE SNAPSHOT

Jun 11, 2007 12:00 PM, By JULIE GALLAGHER


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Supermarkets are improving the shape of Center Store with a healthy dose of natural and organic products and services.

Close to 95% of food retailers polled as part of SN's fourth annual survey of Center Store performance plan on bolstering their health and wellness positioning in the next 12 months.

A substantial 68.3% will do so by implementing nutritional shelf tags and signage, and 61% will update their natural and organic product assortment. Newsletters and online information will aid 36.6% of retailers in this endeavor, while 19.5% will host health-focused in-store lectures.

“The aging population is seeking easy solutions to obesity and age-related diseases that are rising quickly in this age group,” noted one respondent (comments were kept anonymous). “We can add value through shelf-edge information and guidance on low-sodium, low-sugar, diabetic-friendly, organic and other nutritional information.”

Retailers represent close to a quarter of the 181 wholesaler, manufacturer, sales agency and other respondents who participated in the email survey between May 8 and 17.

Noted by more than half of the retailers as the biggest Center Store trend (54.1%) as well as the area of greatest product innovation (53.7%), natural and organic merchandising will become, for many, a point of differentiation.

“Consumers are even more time-crunched today with work, kids, sports and individual activities,” said one respondent. “They're living longer and making better choices. That is why the natural segment is growing so much. Look at the big chains like Whole Foods, and even small local ones like New Seasons. That is where the industry growth is really coming from

Another noted, “Most supermarkets need to find a niche other than price in order to compete, as they cannot compete on price with club, dollar or mass.”

More than half of the retailers (53.7%) polled ranked alternative channels as the greatest single threat to Center Store sales, followed by Wal-Mart (39%), perimeter departments (22%), dining out (17.1%) and other (7.3%). A higher percentage of manufacturers (65.4%) acknowledged the power of drug, c-stores, club formats and natural retailers, followed by Wal-Mart (32.1%), perimeter departments (28.2%), dining out (16.7%) and other competition (5.1%).

Retailers are most commonly focusing on assortment (34.1%) again this year as their No. 1 strategy for drawing shoppers in.

“Assortment doesn't mean having everything; it means knowing your customer and having things that the customer needs and wants,” said one retailer.

“The only way to rebuild Center Store sales is to differentiate the Center Store product mix with items targeted to the market,” echoed another.

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