May 1, 2005 12:00 PM, By Betsy Spethmann

Grocers and packaged goods marketers are mulling how to spiff up the center store, but it's still the perimeter departments that are getting most of the marketing attention.

Grocery Manufacturers of America (GMA) next month unveils results of its pilot test for center-store marketing.

Meanwhile, Albertsons and Ralphs are running innovative multi-brand promotions in their produce departments targeting moms, school kids and Superfoods fans.

At the same time, Safeway has committed to a $100 million campaign themed “Ingredients for Life” to tout fresh foods.

Grocers typically use perimeter departments (produce, meat, dairy, deli) to stand apart from mass-merch superstores and club stores. Perishables account for 50% of supermarket sales, dry grocery nearly 40%, per Food Marketing Institute.

But now grocers are getting squeezed five ways, competing with specialty grocers (Trader Joe's, Wild Oats, Whole Foods) and restaurants as much as club stores, and fighting consumer trends: Consumers eat out more and cook less; more shoppers stock up at mass-merch and clubs — although new data from Unilever shows that stock-up trips account for only 13% of all store visits. And private-label sales keep rising — now $50 billion, 20% of all items sold at food/drug/mass, per the Private Label Manufacturers Association.

So it's time to spiff up center store. GMA's yearlong project could help CPGs track and quickly address changing consumers trends.

But some grocers hesitate to invest in center-store campaigns. “Grocers don't want to cut prices or give up margin by spending trade dollars on consumer promotion or merchandising,” says Rod Taylor, CoActive Marketing Group senior VP-sales promotions and sports marketing.

Ironically, produce departments are fielding the kind of multi-brand promos that would bolster center-store. Albertsons and Fresh Express rewrote Steven Pratt's Superfoods for displays, a 16-page recipe booklet and a rebate: Shoppers who buy the special-edition $25 hardcover Superfoods at Albertsons get $5 back from Fresh Express. Tags throughout all 2,300 stores mark other superfoods; Albertsons may ask those marketers to cross-promote if the current effort goes well. Albertsons custom-published 24,000 copies of Superfoods to remove private-label and competitors' names; general-merchandise buyers placed orders, then shipped books for produce managers to display. CoActive, Cincinnati, handles.

Ralphs is expected to reprise its Xtreme Nutrition campaign this fall, targeting kids six to 14 in school and in-store. The fall 2004 flight brought 19 brands (Fresh Express, Sunkist, Yoplait, Marie's) and 10 extreme athletes (including surfer Bethany Hamilton) to California schools, where 330 Ralphs stores hosted athlete visits to schools and a special SI for Kids issue profiling the athletes (and their fave foods).

Meanwhile, 1,400 Safeway stores and 19 CPGs have seen volume jump 30% with Label$Dollars, cross-coupons for center-store foods attached to deli-scale labels (buy lunchmeat, get a coupon for mayo). LeveragePoint Media, Hoffman Estates, IL, rolls out Label$Dollars to three more supermarket chains this spring.

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