Omni Talk Retail Podcast Summary

Episode Title: Why Space Planning Could Make or Break Many Grocery Retailers In The Years To Come | 5IM
Release Date: July 23, 2025
Host: Omni Talk Retail
Guests: Chris Crates and Brandon Peasley from A&M Consumer and Retail Groups

Introduction

In this insightful episode of Omni Talk Retail, hosts Chris Walton and Anne Mezzenga engage with Chris Crates and Brandon Peasley from A&M Consumer and Retail Groups to delve into the pivotal role of advanced space planning in the grocery retail sector. As the retail landscape undergoes significant transformations driven by inflation, e-commerce, and evolving consumer behaviors, space planning emerges as a critical strategy for success.

The Critical Importance of Space Planning Now

Brandon Peasley opens the discussion by emphasizing the urgency for grocers to reassess their space strategies in the current market environment. He states:

"From a macro standpoint, [we are experiencing] a highly inflationary environment. You also have e-commerce hitting the center of the store and really changing what categories people look to grocery stores versus other channels for...” [00:29]

Brandon highlights several key factors influencing this shift:

• Inflationary Pressures: Rising costs are altering consumer purchasing patterns.
• E-commerce Integration: Online shopping is reshaping in-store category importance.
• Health and Wellness Trends: Increased focus on fresh produce and health-related products.
• Impact of GLP1 Drugs: Changes in consumer health needs influencing store inventories.

A pivotal statistic from their research underscores the disparity in growth and decline across store categories:

"Our research shows over the last five years there's been about $37 billion of growth in the fresh food areas of the store. On the other hand, you've got $27 billion of revenue lost in general merchandising areas of the store.” [00:29]

This significant shift necessitates a strategic reevaluation of shelf space to align with current consumer missions and enhance store differentiation.

Challenges in Implementing Space Planning

Transitioning to the complexities of space planning, Chris Crates outlines the major hurdles retailers face:

"They tend to underestimate the complexity associated with making space changes. It's much, much bigger than just an extension of the assortment process. You're impacting a lot more categories at the same time..." [01:45]

Key challenges highlighted include:

• Complex Category Interdependencies: Adjustments in one category often have cascading effects on adjacent categories.
• Enhanced Customer Experience: Space changes influence overall shopper engagement beyond mere product placement.
• Executive Support: Successful implementation requires comprehensive backing from top-tier leadership, not just the merchandising team.
• Cross-Functional Coordination: Establishing empowered, cross-functional teams is essential for managing the end-to-end space planning process.

Best Practices for Effective Space Planning

When discussing best practices, Chris Crates offers actionable strategies for retailers embarking on space planning initiatives:

1. Start Small with Pilot Programs:

   • Implement space changes in a select number of pilot stores to test and refine concepts.
   • Gather feedback from customers and store associates to iterate on the designs.
   • Example Quote:

     "You want to take a couple of pilot stores and you want to test your concepts, you want to hone those concepts, you want to get customer feedback..." [03:04]

2. Develop Scalable Playbooks:

   • Create comprehensive playbooks that outline procedures for scaling successful space changes across the entire store fleet.
   • Address training programs and standardized methodologies to ensure consistency.

3. Future-Proofing Space Strategy:

   • Anticipate long-term trends and potential shifts in consumer behavior to make informed space allocation decisions.
   • Example Quote:

     "You need to be really thoughtful around what are these trends? Which ones are you going to take a bet on and how are you going to enhance that customer value proposition?" [03:04]

4. Establish a Center of Excellence:

   • Form a dedicated team empowered to oversee space planning initiatives, ensuring cross-functional collaboration and effective decision-making.

Recommendations for Retailers

Brandon Peasley provides foundational steps for retailers to commence their space planning journey:

1. Organizational Structure:

   • Establish a dedicated team to drive space planning efforts, ensuring an unbiased perspective free from traditional merchandising silos.
   • Example Quote:

     "Putting that right organization in place and empowering them is one of the primary things.” [04:22]

2. Data-Driven Analysis:

   • Develop charts comparing shelf space allocation against the margin generated by each category across the store fleet.
   • This analysis helps identify outliers and areas needing adjustment.
   • Example Quote:

     "Build a chart that shows how much of our shelf space... versus how much margin they drive in our business.” [04:22]

3. Category Role Definition:

   • Clearly define the role of each category in addressing customer missions and aligning with overall business strategies.

4. Long-Term Strategic Planning:

   • Adopt a forward-looking approach by projecting space needs 5-10 years into the future, allowing for strategic adjustments that align with anticipated market developments.
   • Example Quote:

     "It's an opportunity to take a merchandising stand and develop a point of where you want to go over the next five to ten years.” [05:51]

Future Outlook and Strategic Cadence

The conversation shifts towards integrating space planning into long-term strategic frameworks. Brandon Peasley emphasizes the importance of regular, significant space adjustments rather than frequent minor tweaks:

"It's not an effort that you do every single year. You're not constantly moving space. I think about it more of a two to four year cadence of where you're making macro space adjustments..." [05:51]

This approach allows retailers to implement thoughtful, large-scale changes that support sustained growth and adaptability in a dynamic retail environment.

Conclusion

The episode concludes with a reaffirmation of the critical role advanced space planning plays in the future success of grocery retailers. By adopting strategic, data-driven space planning practices and ensuring robust organizational support, retailers can navigate the complexities of the modern market and enhance their value proposition to customers.

Brandon Peasley adds a final thought on foundational steps:

"For me, that's the most foundational starting point to say what are the things that really jump out in our business that likely don't make sense and need to be iterated in.” [05:45]

Listeners are encouraged to explore A&M CRG's report on the power of space planning, available through the podcast's show notes, for a deeper dive into the strategies discussed.

Key Takeaways:

• Advanced Space Planning is Essential: In the face of inflation, e-commerce advancements, and shifting consumer behaviors, effective space planning is crucial for grocery retailers.
• Complexity Requires Strategic Management: Space planning involves more than assortment management; it demands comprehensive organizational support and cross-functional collaboration.
• Start Small, Scale Thoughtfully: Implement pilot programs, gather feedback, and develop scalable playbooks to ensure successful and sustainable space changes.
• Long-Term Vision is Key: Anticipate future trends and establish a strategic cadence for making significant space adjustments every few years.

For more detailed insights and strategies on retail space planning, consider accessing the full report by A&M Consumer and Retail Groups through the links provided in the show notes.