GHQ Cover Story 11/05: A Bigger Picture
By George Anderson
Retailers are increasingly turning to private label goods to differentiate themselves in the
market. The success of retailers, including Loblaw’s, Trader Joe’s, Aldi, etc., has helped convince others that, if done right, a store’s own private label can be a reason consumers
choose to go there and keep coming back.
It’s not the only reason however.
“We want to give the customers choices,” Kevin Srigley, vice president of marketing for Giant Eagle told Grocery Headquarters. “We’re not trying to be everything to everyone, but we do want to make sure that we’re giving people the right choices – whether they want the national brand, a premium Giant Eagle brand, a mainline Giant Eagle brand, or the Value Time brand. Different customers in different categories have different needs.”
Instead of taking an adversarial approach, retailers and manufacturers are working together to find the right mix of national and store brands to drive total category and store sales and profits.
Mark Baum, executive vice president of the Grocery Manufacturers Association and RetailWire BrainTrust panelist, said, “Retailers are trying to connect with their consumers – understand who they are, what they want, and provide the optimum mix of products by category.”
National brands, according to Mr. Baum and others, have the traditional advantages of larger research and development budgets to create innovative new products, a history of trust developed through consumer use over years, as well advertising and promotional budgets that keep them front and center in the minds of consumers.
Retailers such as Giant Eagle understand the important role that national brands play.
“Virtually every national brand manufacturer is focused on innovation, on driving volume, on driving customer demand to make sure that they maintain the innovation and brand equity that will cause consumers to choose them. So we will continue to have a very strong and collaborative relationship with our key partners as we look to build their business.”
Moderator’s Comment: Have retailers needed to become more like brand managers as private label has grown in importance? Have they? What factors are standing
in the way of achieving the optimum mix of private label and national brands across the store? –
George Anderson – Moderator