retail news in context, analysis with attitude

In New York, the Democrat and Chronicle reports that Wegmans and Tops customers are joining “the legions of others who are making store brands — sometimes called private label or corporate brands — serious contenders for consumer dollars. According to Nielsen Co., which tracks consumer trends, private label sales grew 10.2 percent in 2008, while brand name sales increased only 2.6 percent.”

According to the story, “Wegmans spokeswoman Jo Natale said the company has seen increased sales of Wegmans brand products, especially over the last year, but she wouldn't give specific figures. At Tops, sales of the chain's two store brands, Tops and Clear Value, were up 5 percent to 15 percent in 2008, said spokeswoman Katie McKenna.”

Both companies plan to increase their private label distribution, the paper reports: “Wegmans, which has about 7,000 Wegmans brand products, makes some of its own, including baked goods, Natale said. The chain is always expanding its offerings, she said, and recently added a revamped line of 18 canned soups.” And Tops’ McKenna “said the chain is in the process of expanding both lines, which now have a combined total of about 3,100 items, to offer consumers more choices.”

KC's View:
When private label works best, it seems to me, it is when it reinforces the overall brand message being communicated by a retailer. (Wegmans may be best-in-class at this.) When private label doesn’t work up to its potential, it is when it is just another/cheaper alternative on the shelf.