Part of that strategy may come to include more so

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Part of that strategy may come to include more so-called trade funds that grocers receive from national brands to promote their products in various ways, Karabus's Mr. Weintraub said. This money is usually hashed out in annual contracts, which, with the changing landscape and end of year coming up, are producing some interesting discussions right now. Additional talks will likely center on price increases that national brands pushed through to retailers throughout the past year as costs for ingredients and fuel rose. With their own in-house brands, food retailers can glean insight into how much it costs to make the goods, and some say they believe certain price rises went too high.
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Page 2 of 2 2009 Factiva, Inc. All rights reserved. "The justification for the increases that we have seen really isn't there based on the changes in commodities and changes in energy prices," Robert Edwards, chief financial officer of Safeway Inc., said at a recent Morgan Stanley retailing conference. Safeway, a grocery chain with 1,700 stores, has over the past couple of years consolidated a portfolio of 70 in-house brands to its 10 strongest, which are gaining market share, and it also operates 32 plants that make private-label goods. Both factors are coming in handy as the company sits down with its suppliers. "With our consumer brands growing at a substantially faster clip than the national brand products are growing, I like our position here," Mr. Edwards said. David Wenner, chief executive of B&G Foods Inc., said that retailers are prying harder when the seller of B&G pickles, Vermont Maid maple syrup and other grocery staples raises prices, but the retailers aren't wielding the strength of their in-house brands as a leverage point. Branded goods can't be expected to drop their prices to those of private-label since that would commodify the products, he said.
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