Store Brands Lift Grocers in Troubled Times

FEW STOCK TEND NATIONAL WELL KROGER BEYOND KNOCKOFF INCREASINGLY ECONOMIC WILLING DEVELOPED SAY RESIST

   As the economy plunges ___ a deep recession, grocery ___ are one of the ___ sectors doing well. That ___ because cash-short consumers ___ eating out less and ___ up at the supermarket. ___ store brand products, which ___ to be cheaper than ___ brands and more profitable ___ grocers, are doing especially ___.

   Led by chains like ___, Wegmans and Safeway, grocers ___ expanded their store brands ___ cheap generics and simple ___ of Cheerios, Oreos and ___-Cola. Now retailers are ___ adding premium store-brand items ___ organics, or creating products ___ direct competition.

   In this ___ climate, many shoppers are ___ to try the newly ___ store brands. They also ___ it is hard to ___ the low prices of store brands for staple goods like milk, sugar and cheese.

   Jan-Benedict E. M. Steenkamp, marketing professor at the University of North Carolina, said past recessions had given consumers a reason to trade down from national brands. This time, he said, the gains may stick because the quality and consistency of store brands have improved.

   Besides the weak economy, the growth of store brands reflects a historic shift in the balance of power between packaged food manufacturers and grocery retailers. As these grocery retailers have consolidated and grown bigger, they are increasingly able to stock their shelves with their own store brands, which bring higher profits and drive customer loyalty — all to the detriment of major food brands.

   Of course, major branded food companies dispute the idea that store brands are just as good as their products and they argue that branded products offer better taste, consistency and innovation, justifying a premium price.

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Have fun....and take care! 274 SEP-A-2010