Name-brand Product Purchases on the Rise

Customers seem to be ditching private-label products as they slowly return to branded foods.

March 08, 2010

NEW YORK - After jettisoning name-brand products for their private-label counterparts, consumers are slowly coming back to branded foods, suggests The Wall Street Journal.

The newspaper noted that private-label products capture around 20 percent of unit food sales, according to a report by Credit Suisse analyst Robert Moskow. House brands increased 3.2 percent at retailers for the four-week interval ending Feb. 20 ?" a slower pace than previously reported. That jump is lower than a 4 percent hike in January and around a 6 percent increase (excluding dairy) last July.

During that same time in February, name-brand food unit sales advanced 2.4 percent, compared with a 0.2 percent decline for the four weeks ending Jan. 23. Some of the increase last month could be attribute to consumers purchasing items surrounding recent winter storms, Moskow said.

Branded food and CPG manufacturers have enticed consumer spending with coupons and other discounts in an effort to lure shoppers back. For example, H.J. Heinz Co. and other food manufacturers are banking on promotions to drive sales in 2010.

Del Monte Foods Co. reported recently that the company is gaining market share from private-label products. However, Safeway has indicated its private-label sales are going strong, but that the chain has seen a flurry of advertising from name-brand food companies.

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