business news in context, analysis with attitude

The Sacramento Bee reports on what it sees as a growing trend toward private label products in the nation’s supermarkets, citing three California-based chains as an example:

“Pleasanton-based Safeway Inc. this year reorganized more than 70 different store brands into 10 ‘power’ brands with updated packaging, including its O Organics, Safeway Select and Basic Red lines,” the Bee writes. “‘The growth has been tremendous,’ said Safeway spokeswoman Teena Massingill. ‘We started O Organics last year with 150 items. It's now up to 200.’

“Save Mart Supermarkets, which carries more than 2,000 private label items, is rolling out a redesigned look for the Sunnyside Farms and Sunny Select brands that it shares with Raley's.

“‘The existing brand was old and tired and held minimal value,’ said Alicia Rockwell, spokeswoman for the Modesto-based chain.

“Raley's, for its part, is trimming its Sunnyside Farms and Sunny Select lines in favor of its low-priced Everyday, midrange Raley's and higher-end Nob Hill Trading Co. brands. ‘We've gone from virtually no (Raley's branded) private label items two years ago to about 2,000 today,’ said spokeswoman Amy Johnston.”

KC's View:
It probably is a fair bet that private label products will be generating a lot more attention in the coming months, especially if a certain British company with new stores in California is able to make its mix – 50 percent private label – work.

But I’d like to offer a caveat to all this. Private label, I believe, will only work if it is part of a larger “private brand” strategy adopted by retailers and made part of their corporate culture and DNA. It has to be a tactic, part of a broader strategy. Otherwise, it won’t have the mind of profound, image-changing effect that people want from it.