The largest food brands in the US are losing shelf space in grocery stores in favor of more fresh food, prepared meals and local foods to better serve the customers’ desire for more healthy alternatives.
“We’ve got to maximize return on our shelf space”, said Don Fitzgerald, VP of merchandising at Mariano’s, a grocery chain in Chicago acquired by Kroger Co. in 2015. Mr. Fitzgerald says customers are more attracted to the steamy pasta at the counter than the dried pasta boxes full of preservatives.
More and more new grocery-store chains are popping up in the country who prefer to reserve space for in-store restaurants and fresh meals than the traditional packaged foods from brands such as Kraft Heinz, Kellogg and Mondelez International.
The change in the shoppers’ preferences had its start a couple of years ago, but it’s only recent that the impact for the large food chains are starting to show because of the added pressure from retailers.
Large companies such as Unilever and Nestlé said in April that food sales in North America are seeing a decline as shoppers avoid the center aisles of grocery stores.
Mr. Fitzgerald said big brands will still have its place in the stores, but attracting customers to pass through the center aisles again requires new thinking.
Retailers such as Wal-Mart Stores are hinting big brands to reduce their prices if they want to stay attractive to customers.