After years of stagnant growth and lack of innovation in center store, it’s time to reinvent and prioritize the core of the supermarket.
The latest report from Daymon reveals a roadmap for success, highlighting areas that will drive change and presenting tools that will create success in 2020 and beyond.
A few of the top-level findings from the report include:
Center store revival is underway
Center store is arguably the backbone of brick and mortar and a critical area of focus as retailers continue to navigate challenges like the rise of discounters, e-commerce, corporate consolidation and unprecedented bankruptcies. Center store departments have a 77% share of the total store, whereas fresh contributes to just 23% of total store sales. Using Private Brands to lead in center store will provide the competitive edge needed to ensure long-term sustainable growth in an increasingly dynamic and complex retail environment.
Private Brand curation and innovation drive center store success
With 98% of National Brand assortment the same across retailers, Private Brand innovation is vital to success and growth. This is especially true in center store where Private Brands are growing twice as fast as National Brands and have a higher penetration than in fresh (19.1% vs. 18.1%).
Best-in-class retailers launch over three times more new Private Brand products than average and shoppers have taken notice. 73% of consumers who shop at these retailers say they always have new and interesting products to try and buy. In turn, these best-in-class retailers are rewarded with stronger share and shopper loyalty.
Private Brands must be treated as true consumer brands
Consumers want brands and products that are unique and tailored to their diverse needs. With more choices than ever, Private Brands must deliver to remain relevant, especially in center store where competition is fierce both within and between channels. To build and maintain a successful program, retailers need to treat Private Brands like true consumer brands by delivering value beyond price, offering exceptional quality, and driving in-store engagement to champion Private Brands with shoppers.
Center store space is ripe for reinvention
While the average size of a supermarket in the U.S. is 45,000 square feet, center store footage is shrinking as most retailers downsize space in favor of expanding perimeter departments. At the same time, consumer shopping patterns are changing, but the traditional store layout has struggled to keep pace. In order to address these compounding factors, retailers need to rethink how to optimize their center store space, prioritizing a breakdown of the silos between departments to drive the transformation.