Thursday, November 06, 2008

At the Supermarket Checkout, Frugality Trumps Brand Loyalty -

While many of you outside of SBU know I run BonaResponds, not nearly as many know I help out with my family grocery stores as well. In class we have mentioned several times that one way sales will decline as a result of the recession (and hence worsening it as well) is that customers will switch from more expensive items to cheaper store brand products. This trend has been noticeable at our four stores and now the WSJ provides more evidence of the same thing.

At the Supermarket Checkout, Frugality Trumps Brand Loyalty -
"Sales of private-label detergent rose 12% over the 52-weeks ended Sept. 6, to $189 million, according to market-data company Information Resources Inc., or IRI. Lower-priced brand-names are posting gains, too. Last week, Procter & Gamble Co. reported that volume sales of its bargain-priced Gain detergent rose 10% in the quarter ended Sept. 30, offsetting weaker results for the market-leading and pricier Tide.

Meanwhile, estimated retail sales of value-oriented Purex fabric softener, owned by Henkel AG, rose more than 60% over the past six months, the company says. 'We view the economic slowdown as an opportunity for our brand,' says Greg Tipso"
At least at our stores, this seems to be partially a mental story as much as anything else. I have never done it, but it would be fascinating to examine store brand vs name brand sales on a daily basis and see if it is tied to economic news and/or stock market performance.

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