Disappearing End Cap Space for Emerging Brands?

I don’t have the means to conduct a randomized survey of chain endcaps. But I track changes over time in some diagnostic retail locations in upscale zip codes oriented to premium CPG buying.

It’s no secret that shelf space has shifted back toward market-leading, non-premium brands in conventional chain retailers. This is because a pandemic-triggered uptick in work-from-home hours has permanently elevated based sales in CPG by 10-12%, especially in food/beverage. 

Retailers chose to add in-aisle shelf space to market-leading brands to keep them in stock. 

But, more importantly, recent inflation has triggered a shift toward more private label sales. And this means more endcap space will go to a retailer’s store label brands in high-velocity categories. Why? The retailer always makes the most penny profit from its store-brand items. And store label can sell large volumes weekly in recessionary environments. 

For now, they are fewer endcaps per store available to name brands. And the financial calculus of a chain retailer has also shifted away from higher-risk display bets on the next Krave jerky or SkinnyPop. Not when a display of Lay’s brings in a nice fee AND is guaranteed, due to past performance, to deliver a known quantity of sell-through. Prioritizing the certainty of a forecastable profit pool in a defined time period steers Target toward the certainty of a Lay’s endcaps vs. the uncertainty of your endcap. It is this thinking that has reduced access vs. five years ago in a recessionary/inflationary environment with more volume moving through the same store count. 

This is not an environment in which chain retailers are likely to offer you access to paid endcaps at ANY price. They need more certain bets and can get end cap fees quickly from massive public holding companies. 

For now, investments in shippers/secondary displays will be the primary way to get attention in-store, as long as you have field sales support to keep them filled and looking good

Dr. James Richardson

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