> CENTER STORE SNAPSHOT

CENTER STORE SNAPSHOT

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

Despite Wal-Mart's attributing a portion of its 3.5% dip in April same-store sales to the recall of several of its Menu Foods-manufactured company-brand products, the recall's effect on pet food category sales won't be as dramatic for most retailers, according to the survey's results.

When polled about the significance of the recall on pet food sales in their stores, 43.9% of retailers reported that it was fairly significant, 26.8% responded not significant, 22% said it was significant and 4.9% said it was very significant. Retailers whose private-label products were part of the recall seemed to be hardest hit.

Our name “is on so many items, and consumer confidence in us seems really low right now,” said one respondent who reported its impact as very significant. “Any recall of any product will cause the consumer to think about what they are buying — the confidence level will lower,” said another respondent, who deemed the impact fairly significant.

Just as retailers are looking to differentiate with customized product assortments, manufacturers are striving to fulfill their needs with innovative products.

When asked about the key strategies to attracting retail customers, 61.2% of manufacturer respondents ranked new products as the key strategy, followed by consumer insights (46.8%), trade promotions (25.9%) and efficient supply chain management (22.3%).

“New products are always key to attracting customers, but the in-store merchandising is what makes it sustainable,” noted one respondent.

Consumer insights (36%), new products (33.1%), supply chain management (26.6%) and trade promotions (24.5%) were seen as the areas that are lacking/need development in the companies of non-retailer respondents.

Alternative channels are seen as the largest competitive force

What are the biggest threats to Center Store sales in supermarkets?


	RETAILERS	MANUFACTURERS
Alternative Channels	53.7%	65.4%
Wal-Mart	39.0%	32.1%
Perimeter Departments	22.0%	28.2%
Dining Out	17.1%	16.7%
Other	7.3%	5.1%

Retailers' sales projections are more optimistic than suppliers'

By what amount do you expect Center Store sales to change this year vs. 2006?

	RETAILERS	MANUFACTURERS
1% to 2%	17.1%	14.1%
2% to 4%	29.3%	34.6%
4% to 8%	22.0%	12.8%
8%+	7.3%	5.1%
Remain the same	14.6%	14.1%
-1% to -2%	7.3%	12.8%
-2% to -4%	2.4%	5.1%
-4% to -8%	0	0
-8%+	0	0

Retailers Only

Private Label

Where do you plan to update/add to your private-label offerings in the next 12 months?

Natural/organic	73.2%
Specialty	41.5%
Ethnic	26.8%
Add a tier or products	17.1%
None	9.8%
Other	4.9%
No Reply	4.9%

Health and Wellness

Which will you use to bolster health and wellness positioning in the next 12 months?

Nutrition shelf tags/signage	68.3%
Growing/updating assortment	61.0%
Newsletter/online information	36.6%
In-store lectures	19.5%
Other	14.6%
None	4.9%

Ethnic Reach

How do you plan to increase your ethnic marketing reach in the next 12 months?


	2007	2006
Increased product assortment	73.2%	68.6%
Participating in community events	34.1%	32.8%
Bilingual in-store communications/employees	34.1%	31.3%
Private-label launch	17.1%	21.9%
Your company won't enhance its reach	12.2%	14.1%
Other	2.4%	3.1%

Ethnic Aptitude

How well does your company know who its ethnic shoppers are and meet their shopping needs?


	2007	2006
Not at all	7.3%	15.4%
Fairly well	53.7%	55.4%
Well	22.0%	16.9%
Very well	17.1%	12.3%

HOW WE DID IT: SN's Survey of Center Store Performance 2007 was conducted May 8-17. It was emailed to print subscribers who provided SN with an email address. SN received 181 responses, broken down as follows: 22.7% retailer, 43.1% manufacturer, 5.5% food wholesaler, 8.8% sales agency and 19.3% other. Totals may not add up to 100 because multiple answers were allowed or because of rounding.