business news in context, analysis with attitude

The St. Louis Business Journal reports on how local companies – retailers such as Save-A-Lot, Dierbergs and Schnucks, and private label manufacturers such as Ralcorp and Gilster-Mary Lee – are finding that the recession can be good for business and the higher margins that own label products usually carry.

According to the story, Schnucks’ store brand sales are up by double digits and now account for more than 20 percent of total revenue; Dierbergs’ own label sales, while not specifically divulged by the company, are growing but are not as big a percentage as Schnucks’. Discounter Save-A-Lot’s private label sales are 80 percent of sales, with about 800 of the chain’s 1200 average SKUs being in private brands.

KC's View:
We are going to see a lot of these kinds of stories, I suspect. In part, that’s because we’ve reached a kind of nexus that allows private label to grow more than in the past. There are more own label products, their quality is higher, supermarkets are starting to put some marketing muscle behind them, and recession-weary customers are more open to such products than ever before in the US.