Published on: March 2, 2009The Los Angeles Times reports on the ongoing tug-of-war between manufacturers and retailers over costs and prices, which the paper characterizing it this way: “The nation's big grocery chains contend that food manufacturers have raised prices too fast and too far, considering large drops in prices for fuel, corn, wheat and other important commodities in recent months. The food companies disagree and say they are still coping with many rising prices themselves.”
In addition to talking about how companies like Safeway and Supervalu are working to pressure manufacturers into lowering their prices, the story quotes Jack Brown, CEO of Stater Bros,, saying that he “recently received a letter from a ‘major manufacturer’ he declined to name ‘outlining the next six quarters of increases. Prices will go up 4% each quarter.’ To counter rising prices, Stater Bros. has increased the number of house brands it offers to give shoppers lower-priced alternatives. Over the last year, Stater Bros. has increased the size of its store-brand offerings to 21% from 17%, but Brown is reluctant to go higher … (he) is hopeful that the greater reliance on house brands by the grocery chains, combined with slowing sales rates for national brands, will force the big food makers to reverse course.
"’When a name brand wants to play ball and lower prices, they will find that we will be the best friend they have ever had,’ Brown said. And he thinks that will pay off for the national brands, his stores and shoppers. ‘I really believe that if you take care of a customer, the customer will take care of you’.”
- KC's View:
- Let me refer you here to “Your Views,” below. After a similar story last Friday that talked about Safeway’s strategy, we received dozen of emails criticizing Safeway’s moves and motives … and these missives certainly speak to the intensity of the debate.