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Aug 31, 2011

Store Brands Play Key Role in Retailing Landscape Transformation

PrintStore Brands Play Key Role in Retailing Landscape Transformation  

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The retailing landscape is changing significantly. And a new report from Chicago-based SymphonyIRI Group says store brands are playing a critical role in this transformation.

“Accelerating Growth in Uncertain Times” — which is based on a survey of 1,000 shoppers — notes that approximately 99 percent of U.S. households tried at least one store brand in 2010. And as of July 2011, more than 75 percent of American households purchased store brands in more than 30 categories.

According to the report, when asked why they purchase store brands, respondents said, “We’re getting great quality for the money we are spending.” Respondents also indicated they would continue to purchase store brands.

Store brand market penetration is expected to exceed 35 percent of total store share by 2015, the report says. The top categories in which store brands are anticipated to grow are meal ingredients and components (center store) and refrigerated, healthcare and beauty care products.

Thom Blischok, global president, innovation and strategy for SymphonyIRI, told Progressive Grocer’s Store Brands that meal ingredients and components together make up the “hottest supercategory” in the market.

“We’re projecting that meal ingredients are going to grow over double digits for 2011 and 2012,” he said. “Shoppers continue to [struggle] with expenditures.”

On the healthcare side, consumers who are visiting the doctor less frequently are looking to a number of products for self-medicating, Blischok said — specifically painkillers, remedies and allergy medications. And in beauty care, anti-aging skincare is huge. In fact, it’s one of the fastest-growing categories in the overall market, with much of the growth being driven by baby boomers.

“Boomers do not want to get old,” Blishock said.

To better position store brand products in these three categories, Blischok offered a number of recommendations. Within meal ingredients/components, retailers should invest in flavor innovation.

“People are getting tired of eating the same old meatloaf — they’d like to try a different kind of meatloaf,” he noted. “So if I were a retailer, I would do two things: I would make sure shoppers understood that I’m there to help them make a simpler, better-quality, more value-driven meal than in the past; and I would be doing some private brand innovation around flavors and taste.”

Within healthcare, Blischok said retailers need to understand their shoppers’ disease states and chronic conditions.

“Allergies are chronic conditions,” he said. “Disease states may be obesity or heart disease. So having the right sets of private brand products in each of the targeted disease states is critical.”

For example, if a retailers’ consumer base has a large number of boomers, then that retailer should consider offering a variety of vitamins that address boomer concerns, Blischok said.

“And [it] may have a combination of national brand and private brand,” he noted.

Beauty care, as well, could contain a “balanced” number of national brand and store brand products, Blischok said.

“But it must be very shopper-centric,” he added.

For more information or to download the report, visit www.symphonyiri.com.
 






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