Carol Spieckerman

FD Buyer: Mind The Gap!

February 2, 2010

FROM RETAILWIRE:
A Nielsen review of department-level price gaps between store brands and manufacturer brands shows that retailers may be hurting themselves in the long run.... Do you agree that retailers are losing category dollars because of aggressive store brand pricing or placing greater focus on private label versus national brands?      [more...]

Most (all?) of the research on private brands leaves out one important fact: Shoppers don't always know a private label when they see one. That can be easy for us industry folks to forget as we closely watch every PL launch and line extension; however, the distinction between private labels and national brands gets blurrier by the day for the very reasons mentioned in the article. As private labels participate at the OPP, mid tier and premium level and as retailers aggressively market them online, in circulars and on the shelf (through brand blocking and side-by-side comparisons), the distinctions, particularly between premium private label and national brands, will be even less clear to shoppers going forward.

Private label's promise is no longer limited to price; however, the more marketing that retailers throw at their brands, the more they earn the right to increase prices for them. Perception and context are everything.