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The Seattle Times reports that “as budgets get tighter and food gets more expensive, American shoppers are increasingly switching to store brands - even upper income consumers who may not have been inclined to give them a try before.

“The nation's biggest grocery-sellers, Wal-Mart, Kroger, Supervalu Inc. and Safeway Inc., all report that sales of their own brands are jumping, as customers can't stop regularly buying food and household items but need to reduce spending … That shift comes as the chains are offering more store-brand products of better quality.

“Gone, for the most part, are the gray, no-frills cans with nondescript labels such as ‘peas,’ packaging that evoked cheap, bland taste. Many now sport colorful labels with names like Kroger's ‘Private Selection’ and ‘Naturally Preferred’ that don't shout ‘store brand!’ The stores have been pushing their own brands in areas such as dairy products, meats and breads where prices have risen especially fast, and are also tapping into increased demand for organics and natural foods.”

KC's View:
People in the food industry, of course, know that the “gray, no-frills cans” have been gone from most chains for a long time, and that the shift toward private label – following a pattern set in Europe years ago – has been taking place for some time. Of course, the American taste for private label items has never been anything like that in Europe, though the evolution has picked up the pace as the economy has slackened.

This is a place where retailers can really develop customer loyalty…as opposed to just advertising price. A private label product is, by its very definition, proprietary…the guy across the street or down the block doesn’t have it. And so, by working with savvy companies to develop own-label items that speak specifically and uniquely to shoppers, a retailer can create a connection to the consumer than cannot be precisely duplicated.

And, if done correctly, such an ongoing program also forces the retailer to think more specifically about the broader store brand … identifying the role and presence that a store must have beyond being a place that houses other companies’ brands.

I say all this, by the way, as a shopper who for the last 25 years has been doing most of his food shopping at a store that always has emphasized store brands – Stew Leonard’s. And I supplement my purchases there by going to two other stores that are uniquely strong in private label – Trader Joe’s and Costco. So I’m seeing this trend from both sides of the marketing fence.