OF CENTRAL IMPORTANCE

BOB BAUER

Despite strong challenges to the Center Store section of supermarkets, these aisles are still vital to consumers when choosing where to shop.

Results of an exclusive SN survey indicate that grocers who are stepping up their efforts in Center Store are making the right move. Consumers ranked the department third in importance in the selection of a supermarket.

A total of 15.1% of those polled ranked Center Store as the most important department in their choice of a supermarket, second only to meat, 35.3%, and produce, 33.4%. Center Store ranked well ahead of

the general merchandise, bakery, health and beauty care, dairy and deli departments.

In the telephone survey, conducted by America's Research Group, Charleston, S.C., 1,000 consumers nationwide were polled on their shopping habits as they relate to the Center Store section.

The survey results indicate the value consumers place on core grocery products, in spite of the industry's shift toward a heavy emphasis on perimeter departments. The results also suggest that category management efforts aimed at the reduction of stockkeeping units have not alienated shoppers.

That perceived value shoppers attach to Center Store was reflected no matter how the survey results were tabulated. In addition to selecting the most important department, consumers were asked to rank the various departments in terms of their value to a store.

Once again, Center Store came in third. While 15.1% of those polled ranked Center Store most important, 22.4% listed it as the third most important department in the store, again behind meat and produce.

"That does surprise me a little bit," said Paul Kelly, principal at Silvermine Consulting, Westport, Conn. "If you think about how a supermarket tries to differentiate itself, it's not generally on Center Store items. They'll try to have a better deli or fresh bakery or whatever. There's a lot of effort, time and space devoted to those sections."

"The problem with most of the [Center Store] sections is that you're carrying pretty much the same things as everybody else is up and down the street," Kelly added. Compared with other departments, Center Store has fostered a higher degree of loyalty. Though 27.4% of those polled say they "often" buy personal hygiene products at other retail formats, the only Center Store products "often" bought at other retail stores by more than 4% of those queried were pet food (4.3%), beer and wine (4.7%), and tobacco products (6.8%).

Consumers are most loyal to supermarkets when it comes to buying packaged goods. More than half -- 55.6% -- of those polled buy packaged goods exclusively at supermarkets.

That number, along with other results from the survey, can also be used to highlight areas in which supermarkets are being challenged.

"If 55% of shoppers are buying packaged goods exclusively at supermarkets, 45% are willing to buy some of those items elsewhere," said Kelly of Silvermine. "That's probably not that great for supermarkets, since that was their exclusive domain for a long time."

The survey results also confirmed a trend on the minds of many supermarket retailers. While 21.7% of those polled in SN's survey said they were buying a greater percentage of their Center Store items in supermarkets than two years ago, 16.1% had increased the percentage of their Center Store purchases made in alternative formats.

Additionally, trips to the alternate formats are increasing. Of those polled, 21.1% said they are making more trips to other venues to buy Center Store goods than they did two years ago; 13.1% said they are shopping less frequently at those stores.

"That's something we have to be careful about," said an executive with a Mid-Atlantic chain. "If they're going to those places more often to buy groceries, that's going to take volume away from us. That's why you see a lot of supermarkets getting a little more creative in their grocery aisles. They have no choice."

Consumers do have choices -- and they are making the most of them. Slightly more than one-quarter -- 26.3% -- of those polled buy Center Store goods in warehouse clubs; 55.5% shop for them in supercenters; 25.4% buy such items in convenience stores, and 23.5% buy them at a mass merchandiser. Natural food stores and specialty stores are each visited by 8.5% of those polled.

Although the reduction of SKUs is a big part of category management, consumers -- 41.4% of them -- rated selection as the most important Center Store attribute. Price also is important to consumers. It was listed as the Center Store section's most important attribute by 37.4% of shoppers.

"That sounds about right to me," said a buyer with a Midwestern chain. "Price is important, but it doesn't surprise me that more people want selection. Convenience is so important to people these days. When they go to a store, they want to get what they want when they are there. If I don't have a good selection or if I don't have items in stock, shoppers are going to get frustrated."

Some say shoppers' craving for selection creates a challenge in terms of category management.

"Here you are trying to get the most profitable mix, but you know that means eliminating some products. Whenever you eliminate a product, whether it's a brand or just a size, some shopper is going to miss it," said the Mid-Atlantic retailer.

The Aisles Have It

Shoppers polled said Center Store is an important component in their selection of a supermarket.

Rank the following in importance in your choice of a supermarket

Meat 35.3%

Produce 33.4%

Center Store 15.1%

General Merchandise 7.7%

Bakery 6.2%

Other 2.3%

Selection a Must

When asked to list the most important attribute for a Center Store section, shoppers ranked selection ahead of price.

Selection 41.4%

Price 37.4%

Ample Supply 11.5%

Other 9.7%

HBC Under Fire

The top five products available in supermarkets that shoppers often buy at other retail stores are from the health and beauty care department. Though the next five belong to Center Store, no more than 6.3% of those polled said they often buy these goods outside of the supermarket.

Personal hygiene 27.4%

OTC medicine 18.1%

Hair care products 14.5%

Stationery/Cards 13.1%

Cosmetics 6.8%

Tobacco products 6.3%

Beer/Wine 4.7%

Pet food 4.3%

Paper Goods 1.3%

Other 3.5%

Exploring Other Options

While Center Store scored well throughout the survey, the results also revealed that shoppers are willing to purchase grocery products from formats other than supermarkets. While the number of people listed beside each item below will only buy products in these categories from a supermarket, the remainder of those polled will shop around -- even if it's just on an occasional basis.

What Center Store items will you buy only from a supermarket?

Packaged Food 55.6%

None 15.7%

Drinks 9.3%

Cleaners 7.5%

Paper Goods 7.5%

Pet Products 4.4%