FINANCE

Report: Store brands show sales increases across the board

BY Katherine Boccaccio

New York City — The Private Label Manufacturing Association reported Tuesday that store brands have capped a decade of strong growth by posting sales increases across all three of the major retail channels in 2010 and pushing dollar market share to new all-time highs in supermarkets, drug stores and total outlets.

According to PLMA’s 2011 Private Label Yearbook, which tracks private label sales and market share trends based on data from The Nielsen Co., in supermarkets, store brands advanced to 19.1% in dollar share and unit share was 23.5%. In drug stores, store brands moved up in dollar share to 14.7% and recorded unit share of 16.2%.

For total outlets, store brands dollar share rose to 17.4%, while unit share came in at 21.8%.

Taking a broader view of the 2010 performance, store brand sales increased by nearly 2% in total outlets — comprised of U.S. supermarkets, drug stores and mass merchandisers, including Wal-Mart — while dollar share advanced by almost half a point to a new record level. Overall, sales were $88.5 billion, another all-time high, according to Nielsen.

In supermarkets, store brands sales increased by $1.2 billion and accounted for 100% of the growth in the channel, even offsetting a sales drop of -$149 million by national brands. The picture was much the same in drug stores, where store brands dollar sales increased by $300 million, comprising 60% of all incremental revenue in the channel.

In total outlets, private label was up $1.5 billion while national brands were down $4.6 billion.

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OPERATIONS

Belk selects Oracle Retail for merchandising system

BY Staff Writer

Redwood Shores, Calif. — Belk department store said Tuesday that it has selected Oracle Retail Merchandising System to enable a seamless, non-channel view of the brand both in-store and online.

“We are enabling next generation best practices that will center on optimizing the customer experience at both the store and ecommerce level,” said Mike Laurenti, CIO and executive VP, Belk.

The implementation of Oracle Retail is part of a larger company-wide initiative in which Belk is revamping or replacing core processes and operations supporting its e-commerce site and 304 stores in 16 southern states.

Belk said it expects to use the Oracle Retail applications to develop next generation practices across its core merchandising operations, creating a foundation that will allow the business to better sense and respond to customer demand through improvements in allocation and replenishment.

The IT transformation coincides with a major rebranding campaign and establishes a technology foundation that will enable the retailer to optimize performance and embrace new business opportunities, it said.

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OPERATIONS

Survey: Retail theft up

BY Marianne Wilson

New York City — Retailers lost $37.14 billion to theft last year, or 1.58% of retail sales, up from 1.44% in 2009, according to preliminary results of the National Retail Security Survey. The annual survey is conducted by the University of Florida for the National Retail Federation, with funding from ADT Commercial.

As in previous years, employee theft accounted for the largest (approximately 44%) portion of the losses. Shoplifting and organized retail crime was second, with 33%. Administrative errors, vendor fraud and unknown causes make up the rest.

The survey also asked retailers what cities were the most problematic for organized retail crime rings. The top cities, in alphabetical order, are: Atlanta, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York, New York/northern New Jersey, Philadelphia and Phoenix.

Loss prevention executives say senior retail leadership is more likely to understand how organized retail crime impacts the company’s bottom line as they zoom in on controlling costs in these challenging economic times.

Over half of survey respondents (58.3%) believe their top management understands organized retail crime, up 16% over last year. As a result, the survey found, many companies are allocating additional resources — including more personnel and greater investment in technology — to fight the problem.

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