What's in store this week?

Can you spot the private label?

As we have talked about for the last several years, private label continues to make inroads in many countries and in many categories. Specifically in the US market, we see more private label introductions, and more of them being higher quality or more unique than ever before. And consumers have noticed. in the US, our research shows that 42% of consumers say private label is better than it was five years ago.

That’s good news for retailers. But is it? What consumers say is that the products they know to be private label are better quality than they were five years ago. But do they know private label when they see it? Not always. Consumers tell us that while most of them recognize that Walmart’s Great Value brand is private label (74%), 38% think that Target’s Archer Farms brand is a name brand (and another 35% don’t know what it is).

Having brands, such as Archer Farms, that do not have any clear association on pack to the retailer, can work both for and against retailers. On the one hand, not having that company association, may enhance consumer confidence as to the taste and quality of the product. But on the other hand, not having that association does nothing to create store or retailer loyalty.

That brings us to this photo. This time, I visited one of the many Walmart stores in Bentonville, AR, home of Walmart’s corporate offices. This shot of the cracker aisle is what got me thinking about retailers’ differing strategies regarding private label. Can you spot the private label in the photo? In this case, it is Walmart’s World Table line, which is a more upscale line of snacks and meals that all have some sort of a “foreign” or global focus. Nowhere on the front of pack is any reference to Walmart. The fine print on back of pack says “distributed by Walmart Stores.”

It seems to me that retailers, like Walmart in this case, do themselves a disservice by not making it clear that the products are part of the retailer’s portfolio. But only time will tell if the strategy is a smart one.