Private Label Comes Into Its Own

February 9, 2018

NACS | February 9, 2018 – Private-label goods have been in stores for years, but today’s store brands are nothing like those found on grocery shelves forty years ago, Progressive Grocer reports. Nowadays, the quality and quantity of private-label brands can be astounding. Nearly every major supermarket chain—and even smaller ones—have private-label lines, and convenience stores like 7-Eleven are following suit.

But new entries into the grocery store market like Lidl with its large selection of private-label items will likely shake up the store-brand category. “We are definitely just getting started when it comes to the revolution of private label products. If you look at the headlines, private brands are innovating when it comes to selection, packaging and taste — but they are still finding their stride. Private brands have the true potential to offer solutions across the store—something no CPG brand can do—and we’ll definitely see more of that in 2018,” said Jim Holbrook, chairman and CEO of Daymon.

Holbrook pointed to “the result of a perfect storm” as to why private label is soaring. “Shoppers don’t care about brands anymore; they’d be fine if 74% of brands disappeared, and that can be a hard reality to adjust to, but the fact is, shoppers are more excited about private-brand-forward retailers. Because of this, supermarkets are rolling out the private labels in an effort to cater to their customers’ demands as they look for stellar-quality products that are tailored to their lifestyle without being overpriced,” he said.

“The perception of own brands definitely changed over the years, and [they] appeal to shoppers of every tier: value, mainstream, specialty and premium,” added Linda Phan, category manager at Topco Associates, which provides private label products. “It’s not just entry level. Retailers have been doing a great job of responding to customer needs [by] expanding their own-brand assortments into the mainstream and the premium specialty-brand tiers.”

These industry experts also see private label as an area for retailers to personalize the shopping experience for customers. “Private brands have a unique opportunity in this landscape to tailor to shoppers in a way that’s scalable, because the retailer controls the process and knows its shoppers well,” Holbrook said. “So, as retailers look to up the ante with their private-brand products, I’m sure we’ll see private label become more sophisticated and relevant brand builders when compared to national brands.”

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