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The Wall Street Journal reports that "as consumers cut back on spending, grocery-store data and analyst research have begun to indicate that private-label products are gaining market share in the packaged-food industry. Inroads by private label goods -- which are cheaper store-named or generic products -- are generally a cause for concern for branded consumer product companies, because they eat into their sales and brand positions."
KC's View:
No big surprise here. I'd expect that every time there has been an economic downturn or recession, private label products have benefitted, which has given them greater credibility and a stronger base of consumer acceptance when the economy rebounds. And while CPG companies may not see this as a positive trend, retailers looking for differential advantages can use strong private label products as a way to distinguish themselves.