Over the past two decades, grocers have driven significant innovation in their perimeter departments to remain competitive in the face of encroachment from a variety of retail channels. Indeed, enhanced bakery, deli, meat, and produce departments now feature added services and unique products aimed at such differentiation. According to Nielsen, this has driven more than 8 percent in perimeter sales growth in the grocery channel.
However, this is coming at a cost; the centre store is experiencing declining sales on a samestore basis, according to Nielsen. Its recent Center Store Study stated that “management practices that are based on a product view of the market cause competition between similar products and categories. In fact, one can argue that the disproportionate investment in the perimeter can actually create a drag on total store sales and profits.”
The result is the traditional center store has become vulnerable against value retail players; with the only key differentiator being price, shoppers are buying center store staples at mass merchandisers, drug chains, and dollar stores. For the grocery channel alone, this channel-blurring and consumer switching trend in the center store equated to $23 billion in lost opportunity over a 5-year period, Nielsen reports.
Innovations to the perimeter notwithstanding, the store still remains a critical component of the grocery business, one that cannot be neglected.
“Our 2012 Grocery SuperStudy reveals that the Center Store accounts for 74 percent of total store sales and 66 percent of total store gross profit dollars,” says Paul Weitzel, managing partner for retail consultancy Willard Bishop. “While much of the focusin recent years has been on the fresh and service departments where retailers feel they can differentiate, the Centre Store continues to be the economic engine that makes a supermarket run. It provides the degrees of freedom to invest on the perimeter.
“Depending on the retailer, I’ve seen these contribution numbers even higher for Center Store. This part of the store should not be neglected and there is definitely an opportunity to put more attention towards the Center Store, create more excitement and create more loyalty.”
What’s more, Weitzel points out that “this can be done without over investing or taking away center store efficiencies.”
Centering on solutions
One solution to the challenge of reviving the center store shopping experience can be found in center store display shelving. Current center store display shelving systems typically found in grocery stores — generally called gondola shelving — use a design that hasn’t significantly changed in more than 50 years. They consist of sheet metal panels that hide more products than they reveal, and are bulky and space inefficient. Sheet metal gondola shelving, with supporting cross members, is typically 1 1/2 inch thick, and relies on bulky, space-robbing brackets for support. In addition, the gondolas are supported on a platform that rises several inches from the floor. The sheer bulk of thesheet metal delivers questionable aesthetic value; moreover, it occupies valuable display space.
On top of this, gondolas are difficult to assemble and adjust, often requiring tools, and cleaning the dirt and dust that becomes trapped in the shelving’s recesses is very labor-intensive.
Appearance-wise, center store gondolas generate no visual differentiation, as there is little versatility in how products are displayed. If a shopper were dropped in the middle of a grocer’s center store aisle, they’d be hardpressed to determine which grocer they were visiting — or even if it was a grocer at all, as other channels often have similar displays for their packaged items.
By simply addressing these challenges of space, versatility, aesthetics, and maintenance via an effective shelving system, grocers can transform their center store into an eye-catching and profit-making destination.
An effective shelving system should go beyond the mere holding of product; it should be a tool that quickly and easily adapts to a grocer’s merchandising needs. To do this it must be space-efficient, versatile, and aesthetically appealing.
Space efficient: Ideal shelving systems should make the best use of the space they occupy. Modern wire shelving systems, for example, start almost at ground level, and don’t need cumbersome support brackets that sheet metal gondolas require. Because of this, they provide more storage space within the same footprint of traditional gondolas, often up to 30 percent more usable space. This translates to more SKUs on the shelf, and helps drive increased sales and profits.
Versatile: Shelving systems should adapt to merchandising changes and contemporary merchandising techniques. They should have the ability to change from stationary fixtures to mobile units by simply snapping on casters, which allow for cross merchandising capabilities or the highlighting of promotional items.
They should also easily accommodate components used for several merchandising options, such as peg boards, slat walls, and pushers, as well as new lighting concepts. This enables the retailer to vary the center store landscape and highlight individual sections. In addition, switching from one merchandising concept to another should be intuitive, and require no tools, thereby reducing labour involved in resetting displays. Needless to say, they should be easy to clean.
Aesthetically Integrated: The ultimate goal of shelving should be to create a theater in which the products are the stars. The fixture should disappear into the background and augment the store’s interior d cor. Light should penetrate it from all angles to effectively highlight the design and packaging of products. The result is a wall of colourful products, with little obstruction.
Grocers Speak Density=Opportunity: What would you do with 30 percent more space?
Metro’s Drop Mat Display System satisfies each of the above components. It creates 30 percent more display space compared to traditional gondolas that occupy the same footprint.
Here’s why: Metro Drop Mat Shelves are only 1/4-inch thick, compared to 1-1/2 inches of a traditional gondola shelf. The Drop Mat Display System eliminates the need for under-shelf supports and bulky shelf brackets, reclaiming 20 percent of merchandising space.
It reclaims up to 10 percent additional space by eliminating the 3 to 4 inch wide center support structure needed for gondolas. More importantly, this extra space enables grocers to enhance the center store with additional products that can differentiate the department and give shoppers a reason to stop.
A plan-o-gram display system impact analysis
conducted by a third-party research firm analyzed the impact of replacing traditional gondola shelving with Metro’s Drop Mat Display Shelving for the salty snacks and salad dressing categories, and revealed that the Metro shelving offered 30 percent more holding capacity. This extra space translates to $29,500 Incremental profit per store annually by replacing just 10 gondolas with Metro units.
In conclusion, the center store is under attack from multiple retail channels, yet this department is key to overall sales and profits. Effective display shelving systems can help grocers revitalise the center store by showcasing product more efficiently, more aesthetically, in more ways — with less labor. Metro’s display shelving systems deliver all of this — and more.