Deloitte: Store brands gain ground over national brands
New York — Consumers have “no regrets” when it comes to dropping national food, beverage and household brand names from their shopping lists. In fact, nine-in-10 shoppers stick to store brands. Those are among the findings of a new survey Deloitte.
According to Deloitte’s American Pantry Study, 88% respondents say they have found several store brands that are just as good as national brands and that allow them to feel as though they are saving money without giving up anything.
“National brands are pressured on all sides, from persistent consumer frugality and low brand loyalty to rival and store brand competition,” said Pat Conroy, vice chairman, Deloitte LLP and U.S. Consumer Products leader. “While consumers initially resented buying less-expensive products out of necessity a few years ago, they have changed their tune. They have shifted from a feeling of settling for lower-priced brands to settling in to store brands distinguished by high quality.”
Across 28 of the 30 CPG (consumer packaged goods) categories studied, Deloitte found that most consumers perceive store brand quality to be the same or better in most of them. Consumers find the highest private label quality in categories such as bottled water, tabletop disposable paper products, food storage, deli meats, condiments and salty snacks.
However, year after year, the study shows certain categories where consumers remain committed to their national brands and less likely to switch, even despite price increases, including beer, pet foods, soft drinks and coffee.
Walgreens’ April same-store sales up 7.6%
Deerfield, Ill. — Walgreen Co. said that its same-store sales rose 7.6% in April, boosted by Easter-driven growth in front-end sales.
The company’s total sales rose 8.8% to $6.49 billion in the month of April, up from $5.96 billion in the same period of last year. Pharmacy sales accounted for 64.5% of total sales for April.
Customer traffic in comparable stores increased 2.6% while basket size increased 5.6% The company said its results benefitted from a later Easter this year, which fell on April 20 compared with March 31 last year.
Fiscal 2014 year-to-date sales for the first eight months were $50.88 billion, an increase of 5.8% from $48.08 billion in fiscal 2013.
Walgreens opened eight stores during April, including two relocations, acquired six and closed two.
Staples to acquire PNI Digital Media
Staples is in the process of acquiring PNI Digital Media, a leading innovator in digital media solutions for retailers, for CDN$1.70 per share, representing a net equity value of approximately CDN$73.9 million.
The purchase share price represents a premium of 31.8% over the closing price of CDN$1.29 of the PNI shares May 2 on the Toronto Stock Exchange and a premium of 28.9% over the 30 day volume weighted average price of the PNI shares on the TSX for the period ended May 2.
More than 30,000 retail locations are connected to the PNI Digital Media Platform, which enables retailers to sell millions of personalized products every year including photo prints, photo books, calendars, business cards, documents, wedding invitations and stationery.
"For years, our retailer partners have used our online, in-store kiosk software and mobile apps to successfully drive millions of orders and in-store visits," said Kyle Hall, CEO of PNI Digital Media. "With the support of Staples, we expect to significantly expand the services we offer for our retailers and partners."
"PNI’s technology gives customers easy access to the best personalized products and related services." said Damien Leigh, SVP, Staples Business Services. "As a part of Staples, we expect PNI to continue to innovate on an open platform and share their innovations with both their current customers and with Staples’ Business Services division."
According to Staples, PNI is expected to operate independently and to continue growing its customer base with Staples’ support.
The transaction is subject to customary closing conditions, including approval by PNI shareholders and the approval of the Supreme Court of British Columbia. The special meeting of PNI shareholders to approve the arrangement will be held on or about July 8.
The definitive agreement for the transaction provides for, among other things, a non-solicitation covenant on the part of PNI, subject to customary fiduciary out provisions. The agreement also provides Staples with a right to match potential third party proposals received by PNI. PNI is permitted to terminate the agreement in certain circumstances, including to allow PNI to accept a superior proposal, subject to fulfilling certain conditions. Those conditions include the payment of customary termination fees in certain circumstances.
PNI shareholders owning approximately 17.8% of the issued and outstanding PNI shares, including all of the directors and executive officers of PNI and Invesco Canada Ltd., have entered into voting agreements with Staples to vote in favor of and support the plan of arrangement. The arrangement is expected to close in PNI’s 2014 fiscal fourth quarter.