Through a special arrangement, presented here for discussion is a portion of a current article from Frozen & Refrigerated Buyer magazine.
Recently named America's best supermarket — again — by Consumer Reports, Wegmans regularly receives accolades, including praise of its devotion to quality private label assortments. Naturally, some national vendors believe there's just too much of it, thereby limiting selection.
"Their private label is everywhere, and many times there are multiple tiers of private label within one category," reports Don Stuart, managing partner at Cadent Consulting Group. "And the private label always seems to be placed adjacent to the biggest national brand, right at eye level. So they make it easy to buy their brand."
Mr. Stuart admits that over-emphasizing the Wegmans brand could become a weakness at some point in the future, though he doesn't think it's there yet.
"There's such an aura around the Wegmans name and that clearly helps its private label," likewise raves food industry consultant Michael Sansolo. "The store itself is so well done that consumers perceive its private label as top-notch as well."
For the most part, Wegmans is, say vendors, acheiving high standards and consistent quality. It's also pretty cutting-edge.
Source: wegmans.com
"Wegmans has vision," explains one manufacturer. "When they look for new items, they seem to know what the consumer trends will be well ahead of the competition."
For Wegmans, the upside of all that private label is good margins. "But margin isn't the goal," says John Rand, SVP of retail insights for Kantar Retail's Market Insights Group. "Branding strength is."
He adds, "Considering the high rate of failure, marginal levels of innovation and duplication of most branded supplier items, it is only surprising that more retailers aren't as selective as Wegmans [about which national brands it will carry]."
One plus for branded manufacturers that are invited onto the shelf: slotting fees are pretty reasonable, which reflects the chain's consumer-centric philosophy. They want to sell products they think their shoppers will like, so they try to reduce barriers to entry. But not all manufacturers see it that way.
"If you're private label, they support you," says one. "If you're not, not so much. They want [national brand] suppliers to 'partner' for very low margins under the guise of savings to the consumer," he explains. Which is fine and dandy if those savings are, indeed, passed along to shoppers. But often, he says, they're put to margin instead. "Frustrating," he concludes.
Says another, "We have national distribution with many chains, but on a per store basis, they are not even close. We provide very effective promotional programs, but none seem to move the needle [at Wegmans]. They prefer a very low price to move our items, which we cannot support, and cheapen the product."