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More than half of retailer respondents say they expect center store unit sales to increase by more than 10% in 2020, with an additional 25% expecting unit sales to increase by 5% to 10%.
Retailers anticipate similar dollar sales increases in center store in 2020, with 75% of respondents expecting an increase in dollar sales of 5% or more — with 51% of those expecting dollar sales increases to increase by more than 10%.
The lion’s share of center store growth can be attributed to the coronavirus pandemic. When asked, “How has the coronavirus pandemic impacted your in-store center store sales?,” 55% of respondents said the pandemic has led to an increase in center store sales of 10% or more, while another 27% expect to see sales increases between 5% to 10%.
Retailers reported that the center store categories having the most success during the pandemic are household cleaners (mentioned by 73% of retailers), paper goods (71%), frozen food (63%) and shelf-stable food/grocery (60%).
When asked what steps retailers are taking to increase center store sales, the overwhelming response was offering at-home delivery and/or curbside pickup at 68%.
In response to which alternate retail channel poses the biggest threat to center sales in supermarkets, just under half cited online retail (49%), with direct-to-consumer channels trailing at 15%. In 2020, none of the longtime competitive threats such as Walmart, dollar stores, natural retailers and club formats was mentioned by more than 10% of respondents.
Retailers were also asked what specifically they would suggest to best fight competitors for center store sales. Once again, delivery and pickup was the No. 1 response, but with less dominance at 34%. Fighting competitors on price was a fairly close second, with 26%, and private label also got some nods here, with 14%.
Overall, retailers are split when asked whether center store has a larger presence in the perimeter department of the supermarket now than in years past (49% say yes, 51% say no).
Private label continues to be a strong performer in center store, with half of retailer respondents saying that private label makes up a larger portion of shoppers’ baskets in 2020. Another 43% report private label sales about the same as last year, with only 7% saying private label makes up a smaller portion of shoppers’ baskets this year.
New product innovations drive private label sales, and 52% of respondents say that is where they’ll focus on adding and updating their private label offerings in the next 12 months. Other categories of private label that retailers are looking to grow in the next year include natural/organic (37%), specialty such as gluten-free, local and imported (34%) and multicultural products (24%).
Health & wellness also drives center store sales. More than half of respondents (52%) say they plan to grow or update their offering in the next 12 months, while 46% also say they plan to focus on new products, such as plant-based and CBD.
Marketing to specific demographic groups can also bolster center store. For instance, more than half of retailers (55%) say they plan to increase product assortment to grow their multicultural customer base in the next 12 months. Other efforts will include participation in community events (28%) and recipe demos/cooking classes (15%).
When asked “Which of the following groups will your shopper marketing efforts focus most heavily on?,” retailer responses were Millennials (33%), health & wellness customers (27%), females in general (11%) and Baby Boomers and Gen X at 9% each.
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