The New York Post has a story about how "the makers of brand-name products such as Tide detergent and Kraft Macaroni & Cheese are bolstering their defenses against store-brand rivals like Walmart’s Great Value products as shoppers’ budgets start to show signs of strain due to persistent inflation … The roughly $361 billion US packaged-food and household-products sector is on alert as shoppers start to buckle under multiple rounds of price hikes, with more in the pipeline. Retailers including Walmart are partners with brand-name product makers like Clorox and Kraft-Heinz as much as they are rivals selling less costly store-brand goods. A bottle of 64-load Tide 'Free & Gentle' laundry detergent cost $12.97 on Walmart.com on April 25, while Walmart’s Great Value 'Free & Clear' brand costs $8.67 for the same number of washes, for instance.
"A survey from financial services firm Jefferies found that roughly 72% of 3,500 consumers are buying cheaper grocery and household items. Inflation 'will ratchet private label growth,' said Jim Wisner, founder of marketing and research firm Wisner Marketing in Gurnee, Illinois. 'It most definitely is a moment'."
The story notes that "executives at Clorox said they have seen private-label rivals make 'marginal improvement' in market share, in a Monday evening earnings call. The bleach maker’s CEO, Linda Rendle, said Clorox would increase promotions - now already higher than last year - if shoppers’ wallets show more signs of stress, a tactic for competing with cheaper store-brand products."
- KC's View:
Interesting, since most of what we've heard from CPG companies in recent months is how they're going to have to raise prices to account for inflation. Apparently there must be some room in there to make cuts if it is going to protect market share.