The grocery industry is experiencing its most significant transformation in decades, and the retailers who understand this shift will thrive while others struggle to survive. In a recent episode of Omni Talk’s 5 Insightful Minutes, the A&M’s Consumer and Retail Group’s experts Chris Creyts and Brandon Pezely revealed startling research that should make every grocery executive rethink their space planning strategy immediately.
The Numbers That Change Everything
Over the past five years, grocery stores have witnessed an unprecedented $37 billion growth in fresh food and produce areas. Simultaneously, general merchandising sections have lost $27 billion in revenue. This isn’t just a trend—it’s a fundamental restructuring of how consumers shop and what they expect from their grocery experience.
What’s driving this massive shift? Chris Creyts points to several converging forces: the highly inflationary environment pushing consumers to be more selective, e-commerce disrupting center-store categories, the rise of health and wellness consciousness, and surprisingly, GLP-1 drugs changing what people actually purchase in stores.
The Complexity Challenge Most Retailers Underestimate
Brandon Pezely warns that most retailers dramatically underestimate the complexity of space planning overhauls. “They tend to think this is just an extension of their assortment process, but it’s much bigger than that,” he explains. The reality involves cascading implications across multiple categories, enhanced customer experiences, and coordination between departments that may have never worked closely together before.
Perhaps more critically, these initiatives require executive support from the CEO down and dedicated cross-functional teams empowered to make decisions.
The Proven Framework for Success
The A&M team recommends starting small with pilot stores to test concepts, gather feedback from customers and associates, and refine approaches before scaling. Future-proofing is equally important: if your fresh business has grown 10-15% over recent years and you expect that growth to continue, you might need to make even more aggressive space changes—perhaps 20-25% shifts rather than incremental adjustments.
The most foundational step? Create a chart showing how much shelf space you allocate to different categories versus the margin they generate. While it’s not a simple linear relationship where everything below the line is bad, it reveals outliers in your business that likely need attention.
The Time to Act is Now
This isn’t an annual exercise. Space planning operates on a two-to-four-year cadence for significant macro adjustments. That makes the current moment critical for retailers who want to position themselves for the next wave of consumer behavior changes.
The grocery executives who recognize this $37 billion shift and build the organizational capabilities to respond will differentiate themselves in an increasingly competitive market. Those who don’t risk being left behind as consumer preferences continue to evolve at an unprecedented pace.
Ready to dive deeper into these insights?
Listen to the full conversation with Chris Creyts and Brandon Pezely on Omni Talk’s 5 Insightful Minutes to discover the specific strategies and frameworks that leading grocers are using to navigate this transformation successfully.
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Be careful out there,
– Chris, Anne, and the Omni Talk team
P.S. To see our full lineup of past 5 Insightful Minute conversations, head here.
Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton and Anne Mezzenga founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.