Store Brands Pump Up Retailers’ Margins

Discussion
Feb 14, 2002
Warren Thayer

To boost margins, supermarkets, drug stores, and mass merchandisers are filling as much as 40 percent of available shelf space with private-label or store brands, according to KPMG’s Kathleen Kiley, Managing Editor, Consumer Markets Insider. The drive for private-label has not affected big-name products as much as a lesser-known
brands, which are getting squeezed off shelves. Store-brand and private-label
goods still comprise a small but increasing portion of total consumer product
sales. In 2001, mass merchants had $6.5 billion in private-label sales, up 12.2
percent from $5.8 billion in 2000, according to the Private Label Manufacturers
Association (PLMA). In supermarkets and
drugstores combined, private-label sales in supermarkets rose 1.1 percent, to
$37.8 billion from $37.4 billion a year ago, according to the PLMA.

Moderator Comment: What does a retailer need to do
to create a positive brand image with consumers for its private label program?

For a fine profile of one of the best at promoting its
brand image, check out the recent Shaw’s piece in Private Label Buyer
written by RetailWire commentator Warren Thayer. [George
Anderson – Moderator
]

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