Many reasons exist for the sales growth challenges in supermarket center-store. These range from the store-created (such as difficulty navigating narrow aisles) to the CPG-created (such as processing that loads foods with sugars and sodium, and labels that are hard to read).
Supermarkets typically feel compelled to carry expansive center-store assortments, even though Quick Trips rule the day and people often want to eat healthier, fresher, local perishables. So it doesn’t surprise that 50% of retailers told Supermarket News in a survey this spring that they’ve reallocated some center-store space to perimeter departments. Also, to help achieve a projected 2% growth in center-store sales this year, 52.8% merchandise shelf-stable foods alongside fresh within perimeter departments.
To be blunt, The Lempert Report feels a major shortcoming of center-store is that its products don’t compete with fresh foods when it comes to flavor. When is the last time you saw a jar of heirloom tomato sauce on the shelf, or meat ravioli made with angus beef in the frozen-foods display? These are just two examples where center-store could improve—many more exist. Overall, the most stimulating aspects of fresh foods haven’t been converted into center-store offerings. Not surprisingly, consumer-spend flows to the perimeter, and packaged foods increasingly play a supporting role on meal tables across America.
Although retailers consider many ways they might reinvigorate center-store, there’s only one way that would make a significant difference, in our opinion: better product formulations that capture more of the wholesome goodness and appeals of fresh foods. This is mostly a challenge for CPG to rethink their lines, but retailers must step up too - both in pushing manufacturers to innovate with fresh in mind, and in developing private labels that truly differentiate with authentic tastes as close to fresh as possible.