Store space is growing for consumables and, in turn, shrinking for nonedible products in the food, drug and mass retail channel, according to a study by Kantar Retail and Crossmark.

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Study: Consumables gobbling up retail space

November 20th, 2012

BOSTON – Store space is growing for consumables and, in turn, shrinking for nonedible products in the food, drug and mass retail channel, according to a study by Kantar Retail and Crossmark.

The companies said this week that their "Know Your Space 2012" joint study of linear space allocations shows "pervasive growth" in retail space dedicated to consumables and a corresponding space reduction in nonconsumables, with the trend taking a toll on hardlines.

The study examines store space approaches used and the merchandising emphasis by department, covering more than 15 departments, in over 700 stores, including national and regional food/drug/mass retailers such as Walmart, Target, Costco, Kroger, Safeway, Supervalu, CVS and Dollar General, among others.

Overall, departments seeing increases in total allocated space in 2011 compared with 2009, the previous period studied, include dry grocery, alcohol, frozen, dairy, meat/seafood, service deli, produce, and health and beauty aids. Areas consequently losing space were nonfood, bakery, hardlines, softlines, cosmetics and pharmacy. The study found that the largest decrease in overall space came from hardlines.

In the drug store channel, the largest space change between 2009 and 2011 was in hardlines merchandise, with an overall decrease of 3.1%.

Supermarkets, meanwhile, have reallocated dry grocery and hardline space across the produce, dairy and frozen departments, the study reveals. Warehouse clubs have shifted space to HBA, dairy and frozen from hardlines and nonfood grocery.

Study lead author Rachel Donovan, director of retail insights for Kantar Retail, noted that the findings show "where old opportunity has gone and where new opportunity lies within the U.S. retail landscape."

"Assessing the amount of space devoted to a department and facing the shopper, and the resulting shopper impact, is critical to anyone interested in aligning to retailer strategies,” Donovan said in a statement.

Other key findings of Know Your Space 2012 include the following:

• Many retailers are more willing to try to meet multiple shopper needs with a portfolio of store formats instead of a single, standard box.

• Target's amount of space for consumables neatly matches its advertising space but remains low compared with Walmart's allocation for that category.

• Kroger has continued to develop and refine its Marketplace format into remodels of its more conventional stores.

According to Alex Siskos, vice president of business insights at Crossmark, the results of the study bear implications for merchandising, category management and shopper marketing.

"It provides valuable information for manufacturers to understand evolving store formats and shifts in product range and space allocation, as well as for retailers interested in their competitive landscape," Siskos stated.

Know Your Space 2012 is the second installment of a joint initiative by Kantar and Crossmark. The first part of the study, "The Annual Retail Space Allocation Study," was published in 2010 and used as a basis to establish key trends.