As we’ve discussed before, private label
is growing, especially in the U.S., with advantages such as lower prices, clever in-store display, and innovative package design for store branding.
The debate continues as to whether this growth will continue or taper off as the recession eases. This article, by Mike Pienciak
, cautions investors to watch retailers such as Wal-Mart, Whole Foods and Kroger for their investment potential.
“Already a major force in store brands, Kroger
has boosted volume of its own brands by 15% this year, according to a recent AP story. That has helped propel store-brand unit share at Kroger to more than 35%, a record for the company.”
Pienciak makes the same argument we have been hearing for a while. Consumers will be driven to try alternatives to national brands due to “household distress” but will stick because of perceived quality and an emotional bond to the retailer.
This newfound consumer loyalty just might survive an economic recovery.
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