www.groceryheadquarters.com 2016/2017 Center Store Handbook 15
No one, not even Millennials, can live on prepared food alone. For all the attention that the perimeter of the store is getting, the center store is surviving and, in some cases, thriving.
Consumers still shop in the center store and are especially interested in products that are innovative and
answer certain needs. Industry observers say some categories are performing better than others, as a result of
various consumer trends. Retailers that focus on these
trends, and figure out how the different categories complement each other, can succeed in the center store.
There are some challenges. According to Reinvigorating
the Center of the Store, a 2015 report from New York-
based Nielsen, the center store is seeing moderate
growth. Meanwhile the perimeter is enjoying healthier
growth as consumers change their eating habits. While
the center of the store is losing share to the perimeter,
in dollar sales, the center is growing. From 2011 to 2015,
total sales for center store food totaled $370.5 billion, for
a compound annual growth rate (CAGR) of 2.2 percent.
Nielsen defines center store categories as grocery,
dairy, frozen and alcohol. Grocery, with CAGR of 2.4 per-
cent, and dairy, with CAGR of 2.8 percent, showed bet-
ter growth than frozen, which had CAGR of 0.8 percent.
Key categories such as cereal, soft drinks and gum saw
dramatic declines. Observers say that cereal is being
impacted by consumers eating breakfast items from res-
taurants instead of at home, while gum and soft drinks are
affected by consumers’ move to healthier alternatives.
Still, the report noted, “the demise of the center store
is grossly overstated,” as some categories are seeing
strength. In dollar sales, CAGR salty snacks were up 5.1
percent, new age beverages were up seven percent and
coffee was up 8. 4 percent. Also, candy increased 4.1
Snacks were up partly because, according to Nielsen,
families with children tend to buy snacks that children
request, and also because consumers on the go are eating snacks instead of meals. New age beverages were
up as people try to consume more healthful items (water
was also up 5. 9 percent), and candy and coffee were
items that were commanding slightly higher prices for
natural or better-for-you versions.
Though dollar sales grew, according to Nielsen, unit
sales in center store foods decreased, albeit slightly,
0.1 percent. That points to another trend, that people
are seeking higher quality foods—and are willing to
spend for them. This finding is consistent with research
from New York-based WSL Strategic Retail. In its How
America Shops MegaTrends 2016 study, called Buying
Happiness, the firm noted that shoppers are rethinking
how they spend their money. Consumers want to spend
their money on things that make them happy, which
means buying products that keep themselves and their