This article from the Canadian newspaper the New Brunswick Business Journal examines the current Private Brand phenomenon from the manufacturing side.
Private labels booming in these tough times
Retail Executive says consumers happily buying private label substitutes that meet their quality expectations
Penny-pinching shoppers have prompted a boost for discount goods businesses and cuts into sales of popular brands.
For Dieppe-based Irving Consumer Products Inc. this has meant increased demand causing record production levels.
The privately-held company is seeing increased sales in paper tissue, towel, diaper and private label brands it makes.
“Naturally in this economic climate the consumer looking at options starts looking at trading down,” says company vice-president of sales Bob Tinnish.
The company’s growth is strongest south of the border where there is more potential for store labels to gain market share from big brand names.
The two biggest players in the tissue products market in the United States have been moving fewer products this year.
Kimberly-Clark Corp. – makers of Huggies diapers, Cottonelle toilet paper, Scott paper towel and the iconic Kleenex brand – took a nearly three per cent hit in sales in the first three months of the year. Then last month the company announced it’s cutting 1,600 jobs, six per cent of its salaried workers.
Proctor & Gamble Co. – makers of Pampers diapers, Charmin toilet paper and Bounty paper towel as well as many other grocery items from detergents to dog food to batteries – saw sales volumes drop five per cent in the January to March quarter.
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