Dive Brief:
-
Loyalty card shoppers at Food Lion stores can save 25 cents with every private brand item purchased, up to $10 per visit, according to Store Brands.
-
Food Lion customers can shop for more than 7,000 private label products, including under the grocer's own brand, organic and natural foods and premium brands.
-
The promotion goes through April 11. There is no limit to how many times shoppers can repeat the deal.
Dive Insight:
Food Lion, which operates more than 1,000 stores in 10 southeastern and mid-Atlantic states, has launched a deal on private label foods with six of their exclusive brands included.
Each private label item purchase can earn the shopper a 25-cent discount, up to a total of $10 per store visit. The shopper has to buy four items to qualify for the promotion, which translates to 40 items for the maximum savings, according to a report in Store Brands.
Grocery stores have invested more in their private label brands to separate themselves from their competitors and to build consumer trust. Private brand sales reached an all-time high of $118.4 billion in 2015, cornering a record 17.7% of the total market, according to the Private Label Manufacturers Association’s (PLMA) 2016 Private Label Yearbook. It's a strategy that make sense, especially among millennial shoppers who are more willing to try the brands as they look for the right balance of price, value and quality.
To be sure, nationally known brands have advantages that work to their benefit: More brand recognition; larger advertising budgets and more experience perfecting the supply chain and ingredient sourcing. But private brands can be a big win for stores, enabling them to control inventory and allowing them to own the shelf space while increasing profitability.
There is a risk that the generic brand fails. Still, consumers seem to value what's in the product more — like is it organic or free of artificial colors and flavor — and what does it cost, than who made it. This is shown by the fact that General Mills, Kellogg, among other food manufacturers, are struggling to keep pace with small startups that can respond faster to rapidly changing consumer tastes and opinions.
One of the easiest things to do in a food processing plant is to switch labels – from one brand name to another. While a “label” can be the grocer's own, the contents behind it might be the same as what other retailers are selling. It's a smart move for grocers to embrace their own private label brands, with the potential benefits far outweighing any risks to their business. Expect the growth in sales of private label foods to continue, especially if they take up more shelf space and grocers do more to promote them.