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Ch3 Article 1 - Rise of Private-Label Products Gives...

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Page 1 of 2 2009 Factiva, Inc. All rights reserved. Rise of Private-Label Products Gives Retailers Clout --- Tough Economic Times Fuel Sales, Promising More Leverage to Grocers Over Suppliers; Stores Hope to Maintain Inroads By Paul Ziobro and Anjali Cordeiro 1,046 words 3 December 2008 The Wall Street Journal J B3A English (Copyright (c) 2008, Dow Jones & Company, Inc.) As shoppers pack their carts with more lower-priced private-label products, grocery stores may wind up picking up an ancillary benefit of having stronger in-house brands: a bit of leverage in talks with suppliers that make branded goods. Penny-pinching consumers have helped food retailers increase their sales of store-branded products, whose sales increased 10% in the past year to more than $81 billion, according to the data firm Nielsen Co. Kroger Co., the largest traditional food retailer in the U.S., reported record sales of its in-store brands in its latest quarter, while other grocers are also seeing upticks as well in their private-label penetration. Private-label gains come as some name brands lose market share, a shift that industry experts say could benefit grocers on several fronts in their dealing with suppliers. To help further promote their brands, branded consumer goods companies may have to kick in more to a retailer's marketing fund to pay for discounts, two-for-one offers or prime placement in supermarket circulars. Retailers may also get juicier rebate offers from their suppliers, as incentive to help push sales of branded products.
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