STORES Magazine - February 2008 - (Page 28) EXECUTIVE SUITE / PRIVATE LABEL Betting the House on Private Brands Emphasizing quality, price and value, supermarkets say goodbye to generics and hello to proprietary programs BY JANET GROEBER he volume of private-label merchandise has been on the rise in all retail sectors over the past decade. Customers have come to embrace proprietary apparel lines at stores ranging from Victoria’s Secret to Macy’s, and the supermarket segment is working to convince consumers that its goods are as good as — or better than — national brands, not just less expensive. T Gone are the lackluster generics of yore, when a retailer would knock off a leading national brand right down to the packaging and cut the price by 20 percent. Mainstream supermarkets — pinched on price by Wal-Mart on the low end and on exotic/organic offerings by the likes of Whole Foods Market on the high end, are responding with comprehensive programs to reach shoppers of all stripes. Supermarket brands now sport slick and sleek packaging that is becoming harder for customers to peg as private label. Some programs are so well done – Loblaw’s President’s Choice brand, for instance — that the Canadian retailer has expanded distribution beyond its own stores. Trader Joe’s grew from a small group of convenience stores to hundreds of locations nationwide on the strength of a cult-like devotion to its often quirky offerings. And Target’s Archer Farms brand is perhaps the domestic gold standard. Launched in 2001, it offers freshSource: Datamonitor baked and frozen items in the chain’s 200-plus superstores — about 2,000 items ranging from desserts to trail mixes, dipping oils and bottled soft drinks packaged to deliver stylish quality, value and customer loyalty. U.K.-based research and consulting firm Datamonitor estimates that the market for private-label food, drinks and personal care products will increase 20 percent — to $131 billion — by 2010. Data-tracking firm Nielsen reports that the sale of private-label food and non-alcoholic beverages rose in the 52 weeks ending July 14, 2007 – and those figures don’t include Wal-Mart, which no longer supplies such data to outside tracking firms. The private-label food, drinks and personal care products market will increase 20% — to $131 billion — by 2010. Private-label sea change A rising tide has turned into a privatelabel sea change in the aisles of neighborhood supermarkets over the last five years. Kroger’s Private Selection Organic was a response to customers’ requests for organic alternatives to everyday items 28 STORES / FEBRUARY 2008 WWW.STORES.ORG http://WWW.STORES.ORG
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