Store Brands Essential to Supervalu’s Strategy

Discussion
Jun 16, 2011
George Anderson

At Supervalu’s annual shareholder meeting last month, company CEO and president Craig Herkert said, "We are focused on acting as one company, working toward a common goal of delivering increased value to all of our customers and meeting their needs neighborhood by neighborhood."

That focus has been expanded to the company’s private label program where the decision was made to replace individual brands for each chain and replace them with a single label under the Essential Everyday name. The Essential Everyday line is a national brand equivalent.

Supervalu said last month that it planned to expand its Shoppers Value price/value line with 80 new items in the months ahead.

In addition to cohesive branding being done on a national basis, the single line approach also helps Supervalu achieve production savings, as well.

Sam Mayberry, vice president of private brands for Supervalu, told the Chicago Tribune that 94 percent of the company’s shoppers buy private label items sometimes, while 20 percent always do. Regular purchasers, said Mr. Mayberry, "rely on private brands to make ends meet."

Discussion Question: Is Supervalu’s approach to private label the right one?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

12 Comments on "Store Brands Essential to Supervalu’s Strategy"


Sort by:   newest | oldest | most voted
David Biernbaum
Guest
9 years 10 months ago

Supervalu’s approach to private label seems to be a “me too” plain label approach, similar to Walmart’s Great Value, but here is the real challenge: Supervalu is not Walmart.

J. Peter Deeb
Guest
9 years 10 months ago

Retailers have mixed results attempting to utilize one store brand name across multiple banners. Supervalu may accomplish their goal but they will need a strong quality program and message; a marketing plan unique to the needs of each of their banners and most importantly, buy in from the banners and their customers.

The most successful store brand retailers use their own name on their products because they have developed their outlets as a brand in and of itself and their strong store brand products are a significant part of their marketing message. Wegmans and Publix are good examples of this.

I believe Supervalu should integrate their store brands with their overall retail branding process and name their products for their banners. The sales they gain can far outweigh the efficiencies and cost savings of a single name across their banners.

David Livingston
Guest
9 years 10 months ago

It’s like one of those Titanic scenarios about which way to arrange the deck chairs to please the passengers. Hard to say if it is the right thing to do unless you have some consumer research to back up the decision. Since many Supervalu divisions are losing their brand appeal, perhaps they have nothing to lose at this point.

Steve Montgomery
Guest
9 years 10 months ago

Is it right to move from multiple PL brands to one? The quick answer would be it seems logical to concentrate on one brand. More efficient production, etc., is obtainable. However, the devil lies in the details.

The article provides no information regarding the relative strength of the other existing PL brands. Are some performing better than others today? The article mentions 20% of their shoppers always buy PL. How are these core PL buyers going to react to a new brand? How are the 94% sometimes buyers? What kind of marketing effort are they going to put behind the brand? Done properly it makes a lot of sense. Done poorly, Supervalu runs the risk of alienating its PL buyers.

Ryan Mathews
Guest
9 years 10 months ago

It all depends on the quality.

Getting rid of labels and offering shoppers a clearer choice is almost always a good idea–assuming of course the surviving label is well supported and attractive to shoppers.

Rationalizing labels reduces the cost of running a private label program, but again, it only works if it’s properly supported and there is a clear advantage to the consumer.

Ben Ball
Guest
9 years 10 months ago

This question is best answered in the form of “if/then” statements.

IF Supervalu uses the economies generated to fund a consumer brand development program to build “national brand” equity for the Essential Everyday line, THEN it can work.

IF Supervalu simply yanks all the products carrying the familiar Jewel, etc., brand names off the shelf and replaces them with an unknown quantity called Essential Everyday, THEN this will fail miserably.

We have written extensively in this and other forums about the wisdom of retailers becoming brand owners–going beyond the traditional “store brand” to build brand equities that rival their national brand counterparts. So applaud the intent, but evaluate the execution.

Kim Zades
Guest
Kim Zades
9 years 10 months ago

Their going private label will not help since the Jewel/Osco stores in the Chicagoland area are really hurting due to the better prices of not only the Aldis and Sav-A-Lots of the world opening more stores, but we also have an influx of more independent local chains that offer better prices, especially with produce and deli items.

Craig Sundstrom
Guest
9 years 10 months ago

If I understand this strategy correctly, SV is replacing a group of private label brands (with make-believe names) with a single name that clearly identifies SV (or perhaps different divisions will now all carry the same brand name…after reading the linked articles, I’m not sure which). I guess the question is why was such artifice carried on in the first place and why is it being abandoned now…is it no longer necessary or did it just not work?

(On a side note, “94 percent of the company’s shoppers buy private label items sometimes, while 20 percent always do”: has SV really identified 114% of its shoppers, and what, exactly, is the value of a survey that shows practically everybody “sometimes” does something…a term that covers the range from once-in-a-lifetime to hourly? )

Lee Peterson
Guest
9 years 10 months ago

Private labeling is not a panacea. It’s not easy to execute and even harder to market right next to brands that have been in place for over a hundred years.

BUT: if Loblaw can do it, Supervalu can do it too. Let’s just hope they don’t go broke before they can execute.

Eliott Olson
Guest
Eliott Olson
9 years 10 months ago

Revolutions always cause a dislocation of resources. Will this PL revolution gain traction fast enough to offset the losses caused by dislocation? Will the buyer of vinegar based products be able to satisfy the tastes of both Virginia and North Dakota? Will existing PL products be reduced in price or thrown away?

Some people are loyal Jewel brand shoppers; will they immediately embrace the new label or bolt for the door? Does Supervalu have the expertise and resources to brand and promote the products in a timely and effective fashion? The new PL name suggests not. Inflation will mask some same store sales loss but this top down initiative is fraught with peril. I wish them luck as they will need it by the truck load.

Kai Clarke
Guest
9 years 10 months ago

This is a clear winner for Supervalu. Consolidated store brands under one brand name creates stronger name-brand recognition, higher perceived value across a national audience, and lowers product costs through consolidation. Consumers avoid brand name “noise” in the retail channel when they are presented with just one private label brand. Add to this the tremendous number of retailers who already successfully deploy this strategy, like Walmart, Safeway, Costco, etc. and you have a proven model to follow when establishing private label branding.

Lee Johnson
Guest
Lee Johnson
9 years 10 months ago

Actions speak louder than words. Execution has never been a strong point of this company–especially when it comes to being new and innovative at retail. My guess is this will fall flat just as all of the other retail projects they have undertaken in the past decade or so.

wpDiscuz

Take Our Instant Poll

How successful do you think Supervalu will be with its new store brand approach?

View Results

Loading ... Loading ...