WSL Future of Health Event

‘Center Store’ comes under more pressure

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A recent article in The Wall Street Journal reported that Target Corp. has informed many of the nation’s leading packaged food suppliers, including companies with household names like Campbell, Kellogg and Kraft, that their products, long staples of grocery aisles, will be deemphasized.

A recent article in The Wall Street Journal reported that Target Corp. has informed many of the nation’s leading packaged food suppliers, including companies with household names like Campbell, Kellogg and Kraft, that their products, long staples of grocery aisles, will be deemphasized.

The discounter’s decision to cut back on marketing and promotional support for many processed food products reflects compelling new realities at the company and in the broader consumables industry.

Beset by problems ranging from a massive data breach that compromised millions of customer records to a recently aborted foray into Canada, Target is looking to restore its image as the discounter with a difference. Chief executive officer Brian Cornell’s strategy envisions the company regaining its footing by excelling in the signature categories of style, wellness, baby care and children’s merchandise. The Journal said that consumables that relate closely to current trends in those product segments will command the lion’s share of the retailer’s time and attention, leaving many former consumer packaged goods mainstays in the lurch.

The transition at Target, one of the nation’s top consumables retailers, is indicative of a bigger phenomenon — the merchandise that comprises what, in the supermarket business, is known as the center store is in danger of being further commoditized. With grocers seizing the opportunity to use meat, produce and other perishables, together with prepared food, as a means to differentiate their stores, packaged goods have lost much of their ­luster.

The good news is that the big CPG suppliers understand the shift in consumer sentiment and are repositioning their businesses accordingly. There are abundant signs that packaged food companies are taking a second look at their lines in light of shoppers’ growing interest in how nutrition impacts health and wellness, and reformulating products to include more natural and organic ingredients.

With suppliers rethinking their approach, it would be a good time for supermarkets and other food retailers to challenge themselves to make the center store new again. Innovative merchandising concepts, coupled with reformulated products, would revitalize an important part of the merchandise mix that, for the moment at least, is stuck in the doldrums.


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