Store Brands Stall
Correction: The Nielsen Company has alerted us to errors in this story and discussion based on a piece on the Brandweek website which was originally in error. According to Nielsen, store brands in fact continue to see growth, albeit at a slightly slower pace, rather than losing share. Please be advised that the following article and comments are left uncorrected. The revised Brandweek article can be found here:
It’s only a four-week sample, but according to numbers from The Nielsen
Company, sales of private label goods in food, drug and mass lost share year-over-year
for the period ending April 18.
Private label growth has been the focus of much discussion in the industry
and there has even been talk that some national brands are looking at introducing
value lines or lowering the cost of existing items to cut into the price
advantage held by retailer brands.
Of course, the relative success of private label depends on the category
and support of the retailer behind it. A senior purchasing executive at a
top regional grocery chain, who requested anonymity, told RetailWire, “Our
support of private label in the past year is like night and day. We’re investing
in it because it gives us a point of difference while allowing us to sell
items at a competitive price point going up against all the 800-pound gorillas
we have to deal with. That said, there are some categories where consumers
are going to buy the store brand and others where they’re not going to touch
Matt Arnold, a food analyst at Edward Jones, said it was too early for anyone
to be writing off private label. In fact, Mr. Arnold, who covers Walmart
and Costco, said store brand sales at many chains was robust.
“A few months ago, there was so much uncertainty in terms of how bad
the economic picture could get and at one point, there was a lot of fear
that the bottom could fall out,” he told Brandweek. “It’s
gotten a lot better in terms of people trading down at all costs.”
Discussion Questions: Do you see conditions being right for national
brands to reclaim some lost share from private label? Will store brands
continue to become a bigger force in retailing even as the economy improves?
How do you explain the lack of success of private label in some categories
while it continues to grow in others?