Once the crowning jewel of grocery stores, “center store categories” – shelf-stable foods and beverages and grocery non-edible items – lost much of their luster over the past decade.
These categories have been at the center of intense cross-channel battles as supercenters, club stores and drug stores all stake a larger claim, resulting in substantial share losses for grocers.
In the face of intense price competition, and in response to growing consumer demand, many leading grocers have adopted differentiation strategies built on a superior position within fresh and prepared foods – reducing focus and investment in the center store.
Further, as health and wellness needs have wielded a greater influence on consumer purchases, many center store categories have faced a gradual decline in demand.
But, there is a sliver lining to this story. We are now seeing signs of a revival.
Center store categories are in the midst of a transformation. The end result will likely differ significantly from the center store we know today, as leaner, more targeted assortments emerge. However, growth potential is there for categories and brands aligned with consumer trends and retail strategies.