• by Sarah Mahoney , October 11, 2007

There's big news at U.S. grocery stores: Customers are venturing back into the center aisles. After years going wild in the produce, meat, dairy and deli departments, IRI reports that shoppers are returning to "center store" products.

Sales of those shelf-stable goods--which account for most of a store's aisle space--grew 3.1% in the 52 weeks ending Aug. 12 across food, drug, and mass channels, including Wal-Mart.

And it's not just the products that are winners. Grocers themselves successfully held onto their market share in center-store sales, a first in more than a decade, as consumers flocked to supercenters, club stores and drug stores.

Not only is that growth on par with total consumer packaged goods sales growth, it also represents something of a moral victory for grocery chains, says Sheila McCusker, editor of IRI's Times & Trends. "This is a big deal in two ways," she says. "First, it's a positive for the manufacturers. And second, for center-store grocers, who have been losing share hand-over-fist for years, this growth proves that the initiatives they are putting into place are working."

Equally important, she says, is that the gains aren't coming at the expense of the fresh foods grocers have been pushing so hard in recent years. "There doesn't seem to be any evidence of a pullback in spending on fresh foods," she says, adding that sales of canned vegetables are relatively flat. "But consumers are really responding to the emphasis on healthy new products in the center aisle, whether it's lighter and lower-calorie versions or enhanced nutritional benefits."

Retailers' latest forays into smaller-format stores, including Tesco's Fresh & Easy Neighborhood Markets, Publix and Giant Eagle, may also provide a chance to showcase center-store innovations, she says.

While this report didn't focus on demographic trends, she speculates that older Baby Boomers, worried about spoilage now that they are empty nesters, may be part of the trend. And younger shoppers are fueling the double-digit growth in such product categories as energy drinks, granola bars, ready-to-drink tea and trail mixes.

IRI also says more sophisticated forays into private labeling, such as. Safeway's successful O Organics line, and tailoring chain stores to specific community favorites are also paying off for retailers.