What's in a name? Big bucks, and more retailers are hoping to cash in.
With consumers in a money-saving mood but still seeking more upscale products, retailers are hoping to make inroads with private labels that encompass products with premium ingredients and more lucrative margins than brand names.
Planet Retail, which provides analysis to retail operations worldwide, estimates private labels make up about 21 percent of grocery and near-grocery (cleaning products, health and beauty aids and other non-food items found in grocery stores) sales, with penetration getting a boost from the recent recession. The Private Label Manufacturers Association estimated total sales at $86.4 billion annually in the United States.
Matthias Queck, Planet Retail research director, said the hardest thing for private labels to overcome is the perception of lower quality, a leftover from the 1970s push that saw economy labels introduced as an answer to the oil crisis.
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