Store brands gaining popularity … even among well-to-do shoppers

By David Bellm -- Packaging Digest, 8/1/2008

Americans are increasingly favoring store-brand products over big brand names, according to a leading food-industry trade association. And as the U.S. economy softens, many of the gains in store-brand sales have been among higher income shoppers.

Retailers like to sell store brands because of the stronger profit margins they offer. But they’re said to also be a factor in branding the store itself, along with fostering loyalty among customers.

In a recent CNN.com article, the Food Marketing Institute is reported as saying that roughly 60 percent of shoppers claim they’re buying more store-brand products, a number that has been steadily rising. At the same time, the leading U.S. grocery chains are also reporting sharp gains in their store-brand products.

Although the weak economy is said to be an obvious factor in the trend, equally important is the increasing quality offered by retailers. Many large grocery chains feature several tiers of store-brand products, with a higher price premium line accompanying a lower price brand.

And even many lower-price store brands have moved far beyond the generic, obviously-cheaper offerings that used to be associated with the category.

Tod Marks, a senior editor at Consumer Reports told CNN.com, "Store brands have come a long way. Over the years, retailers realized that store brands were not just something to be floated out during hard times.”

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