Despite what you may have read or heard, the center of the grocery store isn’t dead. In fact, new Nielsen research that analyzed center store business trends across the U.S. suggests that the industry rumor mill is working overtime. While the perimeter of many retail stores are starting to account for larger sales, the center of store is still contributing to overall growth.
When we look at today’s floor layout, the center of the store includes four key departments: grocery, frozen, dairy and alcohol. Comparatively, the perimeter consists of bakery, produce, deli, meat and seafood. But here’s the real insight: While many fear the center of the store is losing ground, it’s actually digging in. For the 52 weeks ending Aug. 22, 2015, the center of store accounted for $709.4 billion in sales across the U.S., up $56.7 billion from 2011. What were the key growth categories? Grocery, dairy and frozen posted combined annual growth rate increases of 2.4%, 2.8% and 0.8%, respectively.
But those three key areas aren’t the only places where sales are popping. We also see growth across a mix of indulgent products, as well as health and wellness-driven categories.
Salty snacks—which saw the biggest growth in sales this year—are also near the top of the list of products requested by families (with children under 18), with 58% of parents being asked for salty treats according to a recent Harris Poll survey. The appeal of salty snacks is seen across various family breakdowns (54% among those with 3-7 year olds, 61% for those 8-12, 68% for those 13-17) and seemingly increases with age. Candy is also high on the list: among 56% of these parents, kids have made requests for the sweets. Retailers should be aware of shifting preferences over time, as reported requests for candy are heard mostly among parents with 3-7 year olds (63%) and 8-12 year olds (65%) in the household before dropping to 54% among the 13-17 set. Similar patterns emerge when it comes to cookies (64% among those with 3-7 year olds, 68% 8-12 and 57% 13-17).
While many products in the center of store contribute to growth, some may be dragging it down. As healthier eating habits and increasingly hectic lifestyles takeover, the sales of some products in the center of the store are declining.
The most shocking revelation may be the decline of the cereal category. According to Nielsen Homescan data, 90% of American households—and 97% of those households with kids under 18—buy at least one box of cereal in a year. Moreover, cereal buyers with kids purchase an average of nearly 28 boxes of cereal in a year (compared with roughly 17 among those without children). Given all this, perhaps it’s not surprising that cereal is the item kids’ are most likely to have requested, with roughly seven in 10 parents (69%) saying their kids have asked for something in the cereal aisle.
With the center of store continuing to see growth, there are some instigators that manufacturers should be aware of that help drive finger-pointing on the shelves. Just over half of parents (53%) believe their children have been influenced at some point by something to do with a product’s packaging, with 43% specifying characters on the packaging and 32% more broadly citing the packaging’s appearance. Thirty-five percent cite something to do with the display, with 25% indicating a special store display and 18% more generally referring to the item’s position on the store shelf.
Today’s center of store is affected by numerous factors that are helping drive growth. Consumers are redefining how and when they eat, and mealtimes are no longer static occasions that take place mainly in the home. Additionally, children are increasingly making specific requests for food items to their parents. In order to help the center of store continue to succeed, retailers need to understand how to reach consumers in new locations with products that will better fit an increasingly diverse population with on-the-go lifestyles. Retailers should also be aware of products’ appeal to children, with 91% of parents recalling instances where their children made specific requests, and at the same time appealing to parents, as more than half (59%) recall instances they have had to say no. So while many believe the center of the store is in a depression, it’s important to remember that the sky isn’t falling, it’s just not as sunny.
Harris Poll® of 1,009 U.S. parents with at least one child under 18 in the household was surveyed online between Aug. 5, 2015, and Aug. 12, 2015, using the Harris Poll ParentQuery Omnibus.