Grocery stores continue to see erosion of their market share. Consumers are changing the way they buy food and competitors are expanding and selling groceries in new formats. To fight back, more grocers are promoting the offerings in their perimeter aisles.
Sharon A. Lessard, chief designer at Supervalu, summarizes her industry's challenges when she tells the New York Times that “You can pretty much be in Anywhere, U.S.A., in center store, but the perimeter is the fashion side of the grocery business.” It is the perimeter – which includes produce, deli, bakery and other specialty departments – that grocers must now advertise in order to differentiate themselves.
Industry studies show that overall sales of shelf-stable, name-brand products are losing favor with consumers. In one major trend that is frequently reported, most shoppers are now buying store-brand products and want the lowest price on shelf-stable foods. The search for low prices, combined with a need for convenience has driven 12% of consumers to do some grocery shopping online. In addition, smaller formats such as dollar stores and big discount stores are expanding their retail footprint while the overall square footage of traditional grocery stores has stalled. To move consumer packaged goods, grocers must also contend with consumers who:
- Use online coupons 32%
- Use mobile devices 31%
- Check prices at several stores online before leaving the house 23%
While grocers are relying partly on CPG companies to help them with trade promotions and to roll out new and exciting products, they’re also paying attention to another important trend. Michael R. Minasi, president of marketing at Safeway, says people are making more frequent trips to purchase fresh items for dinner that night. Because consumers are focusing on health and wellness and local foods, the specialty items found in the perimeters should be the focus of promotions for the foreseeable future and that strategy might just help grocers win back some market share.[Sources: Facts, Figures, & The Future. SupermarketGuru.com. 13 Aug. 2012. Web. 20 Aug. 2012; Strom, Stephanie. In Grocery Stores, the Perimeters Take Center Stage. NYTimes. 11 Aug. 2012. Web. 20 Web. 2012]