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Perimeter of the Store - US - July 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Fresher foods of the perimeter outpace the center store
Figure 1: Total US sales and fan chart forecast of perimeter of store products, at current prices, 2012-22
Young adults far less loyal to supermarkets for perimeter foods
Figure 2: Perimeter purchase locations – Primary store, by age, April 2017
Produce sets the standard for healthy and natural
Figure 3: Correspondence analysis – Store department associations by type, April 2017
The opportunities
Breaking the routine: nearly half tend to buy the same items every time
Figure 4: Food shopping behaviors, April 2017
Young adults opt for concepts that facilitate enjoyment and exploration of food
Figure 5: Interest in perimeter concepts, by age, April 2017
Personal selection a key to the perimeter shopping experience
Figure 6: Attitudes toward the perimeter, April 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Fresher foods of the perimeter outpace the center store
Growth slows for meat, poultry, and seafood
Fresh produce drives growth
Prepared foods notch strong gains from a small base
MARKET SIZE AND FORECAST
Fresher foods of the perimeter outpace the center store
Figure 7: Total US sales and fan chart forecast of perimeter of store products, at current prices, 2012-22
Figure 8: Total US retail sales and forecast of perimeter of store products, at current prices, 2012-22
MARKET BREAKDOWN
Growth slows for meat, poultry, and seafood
Fresh produce drives growth
Dairy sales slide
Solid sales growth for the in-store bakery
Prepared foods notch strong gains from a small base
Figure 9: Total US retail sales and forecast of perimeter-of-store products, by segment, at current prices, 2012-17
MARKET PERSPECTIVE
Center-store growth lags perimeter
Within center store, shelf stable outpaces frozen food
Figure 10: MULO sales and forecast of center of the store, by segment, at current prices, 2011-21
MARKET FACTORS 
Americans are trying to be healthier
Figure 11: Attitudes toward food, by diet status, June 2016
Younger generations reportedly shopping more
Figure 12: US population by generation, 2016
Growing Hispanic and Asian markets continue to influence grocery sector
Figure 13: Generations, by race and Hispanic origin, 2016
Fluctuating prices impact some key perimeter categories
Figure 14: Changes in food price indices, 2015-17
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Bringing convenience to perimeter: fresh cut salad
Ethical, environmental, free-from claims gain traction in protein categories
Meal kits move to the store (maybe where they always belonged)
WHAT’S WORKING?
Bringing convenience to perimeter: fresh cut salad
Ethical, environmental, free-from claims gain traction in protein categories
Red meat
Poultry
Seafood
Figure 15: Incidence of select packaging claims on meat, poultry, and seafood launches, 2012-17*
Grab and go: stores place great emphasis on prepared foods
WHAT’S STRUGGLING?
Majority of dairy milk segments on the decline
WHAT’S NEXT?
An increasing emphasis on service, experience, and expertise
Meal kits move to the store (maybe where they always belonged)
THE CONSUMER – WHAT YOU NEED TO KNOW 
Supermarkets remain the top location for perimeter purchases
Produce sets the standard for healthy and natural
Breaking the routine: nearly half tend to buy the same items every time
Young adults opt for concepts that facilitate enjoyment and exploration of food
Personal selection a key to the perimeter shopping experience
PERIMETER PURCHASE LOCATIONS 
Supermarkets remain the top location for perimeter purchases
Online shopping for perimeter items still not widespread
Figure 16: Perimeter purchase locations, April 2017
Young adults far less loyal to supermarkets for perimeter foods
Figure 17: Perimeter purchase locations – Primary store, by age, April 2017
Hispanic, Asian, Black shoppers less likely to shop supermarkets for perimeter
Figure 18: Perimeter purchase locations – Primary store, by race/Hispanic origin, April 2017
In their words: fresh produce
In their words: meat, poultry, and seafood
CORRESPONDENCE ANALYSIS – DEPARTMENT ASSOCIATIONS
Methodology
Produce sets the standard for healthy and natural
Deli and in-store bakery seen as time-saving and helpful
Fresh fish and seafood top meat for health
Figure 19: Correspondence analysis – Store department associations by type, April 2017
Figure 20: Store department associations, by type, April 2017
In their words: meat, poultry, and seafood
FOOD SHOPPING BEHAVIORS
Breaking the routine: nearly half tend to buy the same items every time
Perimeter shopping on the increase
Figure 21: Food shopping behaviors, April 2017
Younger adults more actively engaged in perimeter shopping
Figure 22: Food shopping behaviors, by age, April 2017
INTEREST IN PERIMETER CONCEPTS
Strong interest in everyday low prices
Figure 23: Interest in perimeter concepts, April 2017
Young adults opt for concepts that facilitate enjoyment and exploration of food
Figure 24: Interest in perimeter concepts, by age, April 2017
ATTITUDES TOWARD THE PERIMETER
Personal selection a key to the perimeter shopping experience
Perimeter gets the nod for health over center store
Figure 25: Attitudes toward the perimeter, April 2017
Younger shoppers more engaged in, more demanding of the perimeter
Figure 26: Attitudes toward the perimeter, by age, April 2017
In their words: fresh produce drives perimeter shopping enjoyment
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 27: Total US retail sales and forecast of perimeter of store products, at inflation-adjusted prices, 2012-22
Figure 28: Total US retail sales and forecast of meat, poultry, and seafood, at current prices, 2012-22
Figure 29: Total US retail sales and forecast of fresh produce, at current prices, 2012-22
Figure 30: Total US retail sales and forecast of milk, butter, and eggs, at current prices, 2012-22
Figure 31: Total US retail sales and forecast of in-store baked goods, at current prices, 2012-22
Figure 32: Total US retail sales and forecast of in-store deli/prepared foods, at current prices, 2012-22

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