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Store Brands Continue to Rise in the United States

By Ron Margulis, managing director, RAM Communications

The numbers tell the private-label story:

32% of the products in a shopping cart are private-label items;

41% of shoppers consider themselves frequent store-brand buyers;

70% of consumers agree that private-label brands are just as good as national brands; and

Middle-and upper-class consumers are more likely to purchase private labels in the upcoming year than are lowerincome citizens.

RetailWire Instant Poll Results: What percentage of sales at the average supermarket will be private label in 2010?

RetailWire BrainTrust Comments

“The future of store brands is very bright, indeed, in the short term, but it’s important to remember that the long-term future will depend on what national brands do that impact store brands. If, for example, national brands adopt strategies that do not challenge store brands, e.g., don’t try to narrow the price gap, the store brands will have a lot more upside potential. If, on the other hand, national brands develop a more collaborative approach with retailers, it’s likely that there will be less room for store-brand growth.” —Bill Bishop, president, Willard Bishop

“With very few exceptions, my students are big store-brand users and for the most part they do not plan to change their purchasing habits after graduation. The notion that store brands are for the economically challenged is no longer true, as these young consumers strongly link the quality and reliability of the store brand to the retailer. Some of them have also ventured into premium store brands and many are excited about the expansion of store brands into organics. If my students are typical of today’s young adults, there is no doubt in my mind that leading-edge retailers will continue to grow their corporate brands and use them to successfully leverage a differentiated position with consumers now and in the future.” —Phillip Straniero, executive-in-residence, Western Michigan University

Read the entire story and RetailWire discussion at:

Everybody Works Holidays at Best Buy

By George Anderson, editor-in-chief, RetailWire

Best Buy has found a way to make sure it has experienced and knowledgeable temporary help for the holiday selling season. It is taking employees out of headquarters and moving them into stores.

RetailWire Instant Poll Results:

Do you believe the principles of Best Buy’s corporate support volunteers program should be applied to all large retail organizations?

RetailWire BrainTrust Comments

“I think there is an important advantage to sending the headquarters troops to the stores beyond understanding the shopping experience. It is also extremely important for them to understand the store-employee experience, because a Best Buy shopping experience is what the store personnel make it. Headquarters folks often do not understand why stores can’t execute everything the way they envisioned it. You have to design initiatives and processes that fit the way the stores work if you want them to get implemented. One of the most valuable experiences I had at Frito Lay was running a route for a week. You learn what the route salesperson’s tasks, motivations and frustrations are. That was invaluable in understanding how that allimportant link in our distribution chain would react to a given stimulus.” —Ben Ball, senior VP, Dechert-Hampe

“Let’s also be realistic about how much help headquarters will actually be at the store level. Learning the layout of particular stores aisle by aisle is time-consuming in itself, not to mention learning the nuances of the electronics and other products they sell. All headquarters personnel that have never worked store level in December are in for a BIG SURPRISE. My advice: get ready to have your world rocked.” —Matthew Werhner, research editor, Chain Store Guide

Read the entire story and RetailWire discussion at:

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