The Motley Fool has a nice piece evaluating Private Brands and their credibility as investment opportunities, and don’t miss the chart comparing the Private Brand unit share and dollar share with the unemployment rate.
Store Brands Killing the Competition
Think you can hide from slumping U.S. consumer spending behind shares of traditionally steady staples companies such as General Mills (NYSE: GIS) and Johnson & Johnson (NYSE: JNJ)? Perhaps, but it could pay to think outside the proverbial box.
At this point, the cat should be out of the bag: Grocers and other retailers are pushing their own labels as value alternatives to the pricier brand names on the next shelf down. The trend isn’t limited to low-income shoppers, either. From Wal-Mart Stores’ (NYSE: WMT) Great Value brand to Whole Foods‘ (NYSE: WFMI) 365 products, consumers have trade-down options across the price spectrum.
The post closes with this prophetic statement:
Ultimately, investors who casually dismiss private label as a one-hit recession wonder could eventually find themselves wishing that their thinking hadn’t been, well, quite so generic.