Supermarket Display Levels in 2005

Heavily displayed categories such as snacks and beverages receive less secondary display space from supermarket retailers transitioning to perishables-based "lifestyle" formats, according to audits from Information Resources Inc.'s Cross Category Display Database.Safeway and Food Lion are among the chains adopting new formats to differentiate their shopping environments and avoid direct price competition from mass merchants and supercenters. The new formats favor more perishable foods that don't call for as many secondary displays. Safeway has converted nearly 400 of its stores to the new format. An IRI display audit found that updated stores had 23% less salty snack tonnage in secondary locations than traditional Safeway stores. IRI also found that competition from nearby supercenters has a negative impact on secondary display levels in supermarkets, presumably as more stores are converted to image-based formats. Supermarkets in regional market areas with strong supercenter competition showed dropoffs in snack and beverage display levels during the fourth quarter of 2005, while supermarkets in RMAs without strong supercenter competition showed no corresponding drop.Many supermarket retailers in urban areas have been insulated from the effects of supercenter encroachment, but that may change as Wal-Mart steps up its penetration into key markets, said Steve Frenda, executive vice president of consulting for IRI's In-Store Solutions Group, speaking in February at IRI's Reinventing CPG & Retail Summit in San Francisco. "We see it demonstrated in the types of displays that we're seeing," said Frenda. "In supercenter retail marketing areas, we see declines across those top display categories. Conversely, in non-supercenter RMAs, we're seeing display activity in those top categories being very robust and very healthy."Frenda wonders if retailers moving to lifestyle formats have fully understood the tradeoffs that come with reducing secondary display space."One of the things that I see is smaller displays and less tonnage on displays. I do question [this] because I've been in the stores on the weekends where the promotional activity is really putting a lot of pressure on the shelf because we don't have the displays to support the promotion," Frenda said. "Then you've got some challenges to deal with in terms of overall consumer satisfaction." Other observations from IRI's audit of supermarket displays levels in the November/December 2005 time frame verses 2004:Overall supermarket display levels declined 5.4%. Perimeter/aisle/shipper displays, which account for nearly 60% of total display volume, dropped 8%, the largest decline among display types. The number of endcap displays, which account for 37% of displays, posted a modest 0.2% increase. Among product types, health and beauty products posted the largest drop of 14.8%. Frozen foods posted the largest increase: 3.9%. Among products typically displayed at the perimeter, new age beverages (bottled water, energy drinks, sports drinks, ready-to-drink tea) posted an 18.4% increase in display levels. Snack and granola bars dropped nearly 30%, the largest decrease in the group. Overall display levels peaked consistently during the holiday seasons from 2003 to 2005.

P2PI MEMBERS

JOIN P2PI

You May Also Like

White Claw Goes Non-Alcoholic

Walmart Canada Invests $1 Billion to Modernize the Shopper Experience