On Tuesday iconic daily newspaper New York Times published a more than 1,100 word article that marking a dramatic shift in the way the media reports the story of Private Brands. This is the story of retailer owned BRANDS – BRANDS that major retailers from Safeway to Target to Ahold’s Stop and Shop will leverage and grow to differentiate their retail experiences.
Grocery store brands once carried a stigma. With no-frills white packaging that telegraphed bargain basement and low quality, they were a last resort for consumers on tight budgets.
Today, they are the stars of grocery store shelves and refrigerated cases.
From Safeway’s Open Nature to Target’s Archer Farms, grocery brands are challenging traditional brands from food companies, and preserving or improving their own slim profit margins.
“There is really widespread acceptance of store brands among consumers,” said Janet Eden Harris, senior vice president of Market Force Information, which recently surveyed consumers and found that 96 percent said they bought private-label brands at least some of the time. “Sometimes I think they don’t actually know what is a store brand.”
Sales of store-brand foods and other grocery merchandise took off during the recession, when shoppers practiced a forced frugality. But to the surprise of consumer and food analysts, sales of store brands have remained strong even as the economy recovers.
Over the last three years, sales of store brands grew 18.2 percent, accounting for $111 billion in sales, according to Nielsen. That is more than twice the rate of growth for national brands — 7.9 percent to $529 billion — over the same period.
“We expect private brands will continue to grab share year over year because of investments they’ve made in enhancing quality, innovation and hiring more people with brand experience to help them with marketing and promotion,” said Todd Hale, vice president for consumer and shopper insights at Nielsen.