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Center Aisle Woes

More grocers and consumers are choosing fresh foods over packaged products.
May 2, 2017

​NEW YORK – Instead of promoting canned soup, cereal and cookies from top CPG companies, more grocery stores are choosing to position fresh foods, hot prepared meals and foods from local upstarts that appeal to health-conscious consumers, reports The Wall Street Journal.

“We’ve got to maximize return on our shelf space,” Don Fitzgerald, vice president of merchandising at Mariano’s, a Chicago grocery chain acquired by Kroger Co., told the news source. Shoppers, he continued, are drawn to steamy pasta at the store’s deli counter, rather than a box of dried macaroni and powdered cheese.

The news source writes that ShopRite and other grocery chains around the country are building new stores formats with less space for traditional packaged foods in the center aisles, and more space devoted to in-store restaurants and fresh prepared meals for take-home consumption. “It’s by demand of consumers looking for a quick meal,” Natalie Menza, ShopRite’s director of health and wellness, told the Journal.

In addition to grocers, drugstore chain CVS said it’s planning update its stores to focus more on healthier merchandise and foods. The new format is expected to be up and running at about 300 stores by the end of 2018.

A 70-year-old shopper at a Chicago Mariano’s store told the Journal that she stopped buying chips and cereal in favor of chicken breasts, brown rice, potatoes and fresh vegetables and fruit. “I stopped buying that stuff because it has too much salt and sugar. Even the boxes that appear healthy, when you read them, they really aren’t,” she said.

While shopper preferences for healthier choices shifted several years ago, the impact on CPG companies is now intensifying as retailers strive to meet consumer demand. The Journal writes that companies such as Unilever and Nestlé SA said in April that North American food sales are underperforming as customers avoid the center aisles of grocery stores.

Companies like PepsiCo Inc. are working with retailers to be creative, notes the Journal. “That’s a conversation we’ve been having with some of the retailers, to say, ‘How can we help you rethink the center store so that we can bring growth back,” said Pepsi Chief Indra Nooyi on a conference call. “Our hope is that with the rejuvenation of the center store, our categories will grow, too.”