Limited assortment grocers including Trader Joe's, Aldi and Save-A-Lot emphasize store brands in store merchandising. More traditional supermarkets, which still rely heavily on national and regional brands, are putting more of a focus on store brands as consumer acceptance grows and competitive pressures squeeze margins.
With the economy hitting a rough patch and consumer prices rising in a variety of areas, some expect to see store brands become more important among consumers looking to save money.
According to the Private Label Manufacturers Association (PLMA), 16 percent of supermarket sales are generated by store brands.
Sherri Carnes, who shops at the Morcroft Harris Teeter, is among the growing number of consumers comfortable buying store brands. She told The Charlotte Observer, "They're a lot cheaper and a lot of times you can't tell the difference with the taste."
Harris Teeter has expanded its store brand offerings to address the growing opportunity. "We see it as a great opportunity for our shoppers to have an alternative to conventional items and save money," Jennifer Panetta, a spokesperson for the chain, said.
Mike Mannion, director of sales planning and corporate brands for Bi-Lo, told the Observer, a store brand "only benefits you if customers acknowledge and accept the brand. A poor private label can chase a customer away as much as a strong label can build loyalty."
Discussion Questions: Will retailers increase the pace of new store brand SKUs if the economic news continues to be troubling? Do you expect to see retailers begin to deemphasize super premium and premium store brands for more value-priced products? Will consumers return to national and regional brands once the economy picks up or will they stick with retailer-controlled labels?