Private Labels continued rise in this difficult economy is reported daily on almost every news outlet, so this story from the Wall Street Journal is no surprise. It chronicles the challenges of national brands in commodity categories, with a focus on McCormick Spices.
Walmart Spices Up Private Label
A weaker opponent can put up a good fight in a tug of war, but once the rope slips, recovery becomes a long shot.
Such is the position of some brand-name food companies trying to hold their ground against generic competitors. Private-label sales were 13.4% of a basket of U.S. groceries in 1994, but likely reached a high of 17.5% in 2009, fueled by a tougher economy, says Robert Moskow of Credit Suisse.
The question is whether Americans stick with generics if the economy improves. In some consumer categories, like razors, quality differences are noticeable. A better shave may be worth paying for again when it becomes affordable.