Consumer trends have been shifting to the perimeter of the supermarket, as shoppers opt for more fresh and unprocessed foods. However, the center store is still important to customers, particularly the upcoming Gen Z generation, which is increasingly influencing grocery purchases.
More than 99% of shoppers purchased from the center store in 2017, spending an average of $1,408 a year in the section, according to Catalina's The Center Store Revolution: Innovation Drives Trips and Category Growth. The center store accounted for 60 annual trips per shopper, per store, down one trip from 2016. Eighty-one percent of all shopping baskets included at least one center store item.
The most popular categories in the center store include non-fat/low fat ice cream, value-priced entree frozen dinners, sparkling/seltzer water, ready-made coffee drinks, fresh rolls, dried meat snacks, vinegar and a variety of snack and candy categories. The non-fat, low-fat, lite ice cream subcategory grew 66.9% in dollar sales, while regular and premium ice cream declined 3.3%. The average shopper in the category spent $21.37. In the water – sparkling/seltzer category, dollar sales rose 14.9% and trips increased 5.5%.
As we have previously noted, Generation Z (those born in the mid-1990s to the present) is becoming an increasingly important generation to watch, particularly for the food industry. Even though members of Gen Z are likely not doing much of their own grocery shopping yet, they do actively participate in their family's grocery shopping, according to a study by IRI in partnership with The Family Room LLC. The study found 47% of older Gen Z consumers, aged 18 to 21, participate in their household's grocery shopping, as parents say their Gen Z kids influence what they buy at the grocery store.
So how can supermarkets and manufacturers attract these new shoppers? Personalization. Thirty-eight percent of Gen Z members like to get personalized ads or promotions in their social media feeds, much higher than their Millennial counterparts. For younger Gen Zs, personalization is seen as a great way to discover new products/services. In addition, variety is very important to the cohort, as the number of unique UPCs purchased in households with Gen Z kids are significantly higher than those without. For example, in the cold cereal category, Gen Z households purchased 12.4 unique UPCs per household, compared with only 7.6 in households without a Gen Z member.
However, brands must make sure to really know Gen Z shoppers before they try to offer personalized ads to them, as the study found the generation has little interest in or patience for brands that don't sincerely work to get to know them before marketing to them.
E-commerce food sales have been growing at a rate of about 22% per year, and it is expected to make up close to 10% of the overall food and consumables market by 2023, according to data presented by Inmar at the Food Institute's annual Future of Food Retailing webinar, sponsored by BMO Harris Bank. Inmar's Jim Hertel and Craig Rosenblum took a deep dive into the growth and contraction of retail in 2018 and projections on the future of food retailing amidst Amazon's...read more
Jennette has been with The Food Institute since 2013. As Marketing Director, she is responsible for promoting all Food Institute books, seminars and webinars, as well as writing and editing the Food Institute’s annual publications. Additionally, she writes for and edits the daily news update, Today in Food, and contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and graduated from Rowan University in 2012 with a degree in Communication Studies.
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