Private Label Maneuvers

• Supermarket star Wegmans pushed its private label brand this past Summer with a promotion called “Stock Up for Summer.” The goal was to induce shoppers to buy fresh and frozen items like berries in larger club store-sized packaging, Atlantic Salmon (in club-size frozen assortments), “dry rub grilled pork chop with spinach & papaya salad” from the prepared-meals department, along with Tastes of Wegmans-brand chips, soft drinks and even paper goods.

• Target has given its PL products a face-lift under the new name “Up &Up” with an arrow logo replacing the ubiquitous bulls-eye one, something the company already did with its Archer Farms and Choxie house brands. Kathee Tesija, EVP for Merchandising, says 40 product categories have been transformed. Target’s house brands have shown 25% growth over the past five years, with off-price the selling point (usually 30% less than national brands according to Tesija). The retailer claims it doesn’t want to lose its core chic-ness with consumers by becoming a discounter, but is none the less experimenting with matching prices in three test markets. First-quarter earnings were $522MM, off from last year’s $602MM, though better than forecast. Sales rose a modest 0.4% to $14.4bn from $14.3bn. Same-store tallies declined 3.7% despite what company execs styled as “strongly positive” grocery numbers.

• German-owned Aldi is moving into Florida to compete against Publix by stocking up to 95% house brands, far above the national average (9.7%) as reported by the Food Marketing Institute (FMI). The Southeast market will be more competitive now that Jacksonville, FL-based Winn-Dixie has emerged from bankruptcy with new packaging for its house brands which sell at different price points. Thrifty Maid is the rock bottom private label brand alongside mid-tier Winn-Dixie and premium gourmet Winn & Lovett brands (the company’s original name). Even as private label threatens to consume many national brands, some of those brands continue to conspire with the threat. Publix paper towels, for example, are produced by giant Georgia-Pacific (makers of Brawny among other national brands), while its long-grain rice is packaged by Mahatma.

• Food Lion gave consumers coupons worth between $1-$10 for purchasing their house brands during is “Private Brand Super Sale.” The value for the coupons comes from the number of products purchased with a Food Lion loyalty card ($1 for buying four items up to $10 for 10). Fresh meats, produce and random weight deli and bakery items are excluded.

• Publix is going one further and giving away three of its private label cereals: Buyers of Kellogg’s Special K Red Berries cereal, Special K cereal bars and Quaker raisin, date and walnut cereal can take him the Publix equivalents (Publix-brand raisin, date & walnut cereal, strawberry bars, and crunchy rice & wheat cereal) for free in an effort to get consumers to switch over.

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