Store Brands Bring Big Bucks

Looking for ways to boost your grocery sales? Sales figures show that in today’s scary economy, shoppers are pinching pennies wherever they can—and one way that’s becoming increasingly popular is buying generic or so-called "house" brands.

Gone are the days when generic brands looked, well, generic. Today’s generic brands are more attractively packaged, and the effort is clearly paying off: A growing number of customers now considers store brands as desirable as national brands supported by high-cost advertising campaigns.

Sales of store-brand goods increased to a record $80 billion in the 12-month period that ended in September, up from $73 billion during the same period in 2007, according to the Private Label Manufacturers Association (PLMA).

"When large numbers of Americans start to feel that their jobs are at risk or their incomes are going to be lower, they have to find less expensive ways to buy products for their homes," PLMA president Brian Sharoff explained, and the easiest way to do that is to buy less expensive brands.

C-store retailers can look to grocery stores’ sales for confirmation: Kroger reports its private labels represented a record 26% of overall grocery sales as of June. The chain now offers more than 14,400 private-label products, up from 7,800 in 2003.

H-E-B and Randalls don’t give specific data, but spokespersons for both chains recently acknowledged that their store brands continue to outsell national brands.

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