Center-store profit zones

Store Equipment & Design, April, 2000 by Monica Buckley

"Then, the product begins to speak for itself," Gintert says, "and the customer realizes they have never seen, say, ginger-flavored soy sauce before."

Lewis agrees, saying, "Design on its own is not going to do very much, if it's making a promise that isn't being delivered by everything else."

Product assortment is an essential element on which supermarkets sometimes miss the mark, according to Allen Hill, of Chicago-based information service Information Resources, Inc. The problem is underscored, he says, by the fact that 20 percent of a store's merchandise is still responsible for 80 percent of sales. Retailers aren't doing a good enough job of staying in stock with merchandise their customers want, Hill says.

Robert Blattberg of Northwestern University's Kellogg School of Management says the big chains, with the exception of a few like Wegmans and Ukrop's, are not doing nearly enough experimentation to determine what customers want to find on their shelves. "With a two-out-of-10 success rate when it comes to new product introductions in the packaged goods area," he says, "you would think these guys would be doing something to improve that average."

The right mix is crucial to the success of any department. Gintert warns against "just taking that slotting allowance" and suggests really pushing buyers to find interesting product offerings. Needler agrees, saying that "getting new items to the shelf as fast as possible" will be a top strategy for bringing back center-store sales.

George Chirtea, an Atlanta-based consultant, predicts the center store is going to "get really important again." But the long rows of aisles have got to go, he says. Chirtea hails Albertson's new store in Houston as a prototype that introduces departments in a big way. "They call it the station store, and they have departmentalized the whole center of the store, with a baby department, a dessert department, a just-for-women department."

One of the keys to the department concept, Chirtea says, is that refrigeration will be found throughout the store. The new departments, more and more, will feature freezers and refrigeration in-line, so the Italian department, for example, holds frozen foods along with dry goods and bakery. More labor expense will go into this new center store, but profits will follow, say a number of designers and retailers.

The concept of opening up the center and coming up with new concepts for selling there entails looking at customers needs and translating them into merchandising. Jogging some of the old habits of thinking may be the way to start. Says Chirtea with a chuckle, "One of the hardest things to get a supermarket operator to understand is that you may end up with tomato sauce in five different places all over the store!"

Wiring the center for dry goods

Bill Andronico has a thing for wire shelving. Speaking from the center of his Danville, Calif., store (see related article on page 14), he says there's an art to using it, but one worth learning.

"You don't see the fixture, you see the product," he says. "These [product manufacturers] spend incredible amounts of money designing labels, and when you put it on the shelf and it shows off the label best, haven't you really accomplished what you've set out to do?"