“Store Brands Lift Grocers”
Full: “Store Brands Lift Grocers in Troubled Times.”
By ANDREW MARTIN
December 13, 2008
LOVELAND, Ohio — Linda Severin, a Kroger vice president, has spent the last two years dreaming up new products
to sell under the chain’s store-brand labels. Her creations, while inexpensive compared to national brands, are often
fancier than the store brands of old. They include Mediterranean-style pizzas and cake mix with edible images of
Her timing could not have been better.
As the economy plunges into a deep recession, grocery stores are one of the few sectors doing well. That is because
cash-short consumers are eating out less and stocking up at the supermarket. And store brand products, which tend to
be cheaper than national brands and more profitable for grocers, are doing especially well.
Led by chains like Trader Joe’s, Kroger, Wegmans and
, grocers have expanded their store brands beyond
cheap generics and simple knockoffs of Cheerios, Oreos and
. Now, retailers are increasingly adding
premium store-brand items like organics, or creating products without direct competition.
For instance, the team led by Ms. Severin, Kroger’s vice president for corporate brands, developed three-minute
microwaveable pizzas as an easy snack for children when they return home from school.
“This is designed for moms,” Ms. Severin said. “This is a good example where we didn’t knock off the national
brand, but we thought, ‘How can we deliver what our customers are looking for?’ ”
Dollar sales of store brands increased 10 percent during the 52 weeks before Nov. 1, compared with a 3 percent gain
for branded products, according to the Nielsen market research company.
Store brands now account for nearly 22 percent of products sold at the grocery, up from 20 percent a year ago,