Merchandising Features / Retailer Features / Trend Features / Product Development

Regional Royalty

March 28, 2012
KEYWORDS supermarket
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Competition in the U.S. supermarket industry has never been greater. Here are some of the regional retailers that have successfully found a way to compete with the mega-retailers and use private label in doing so.
The role and importance of private label for regional retailers is critical as it can be a point of differentiation. Rather than simply copy the national brands, these retailers prominently and consistently promote their private label programs in terms of quality and value, rather than on price alone.

Eastern Region
Springfield, Mass.-based Big Y made headlines last year when it became the first grocery chain to offer Groupon deals digitally loaded to shoppers’ loyalty cards. The retailer in January of 2012 offered a Healthy Deli Package Groupon deal which offered two loaves of Fiber One bread and thin slices of private label World Classics Trading Co. corned beef, turkey, pastrami and chicken.
“While embracing social media and new technologies to deliver value to shoppers is cutting-edge today, it will be table stakes in the near future,” says Jon Hauptman, partner at Barrington, Ill.-based Willard Bishop. “Big Y recognizes the importance of leveraging social media vehicles when marketing to shoppers and has the courage to test new ideas. Everyone across the industry is watching what it’ll do next.”
Another thing that Big Y does well is demonstrates a very strong commitment to its private brands, Hauptman adds. “It does an outstanding job of ensuring its Big Y brands are available across the store and it merchandises them front-and-center on the shelves.”

Rochester, N.Y.-based Wegmans racked up estimated private label grocery sales of $1.3 billion in 2010, putting it at No. 25 on PLBuyer’s exclusive list of North American private label retailers, as compiled by Miami-based Retail Systems Research.
Wegmans really sets the bar high when it comes to its private label program, experts agree.
“Wegmans is the classic regional player, that understands its retail brand and brings it to life through its private brands,” says Christopher Durham, founder of the blog and member of PLBuyer’s editorial board. “It understands the art of leveraging every touchpoint to convert customers into passionate advocates.”
Wegmans always makes sure its private label products are front and center by utilizing unique marketing strategies like contests. For example, the retailer announced its “Veggie Kids Contest” earlier this year that featured recipes listing a variety of Wegmans private label products. Last year, to celebrate the 10th anniversary of its Menu magazine, the retailer held a “Products We Love” promotion that featured customers leaving comments on the Wegmans Fresh Stories blog page specifying which Wegmans private label products they had fallen in love with over the past decade and why.

Southern Region
As always, Lakeland, Fla.-based Publix is a private label trendsetter.
Publix was chosen as PLBuyer’s 2011 Private Label Retailer of the Year and the retailer also racked up estimated private label grocery sales of $5.5 billion in 2010, putting it at No. 8 on PLBuyer’s exclusive list of North American private label retailers.
In January of 2011, it introduced a variety of private label domestic and imported cheeses, taking its cues from customer feedback in regard to what varieties to offer.
In January of 2012, the retailer rolled out a new deli merchandising system to make it easier for customers to find what they want.
One thing Publix does well when it comes to its private label is consistently leverage its portfolio of private brands to enhance and build on its retail brand, says Durham. “Its private brands are truly an extension of the Publix experience.”
Another thing Publix does well is create excitement around its brands by offering limited-edition type products around various seasons and holidays.
“It actually emulates what the national brands do,” says Paula Rosenblum, managing partner for Retail Systems Research. “It’s a smart move and it keeps people looking at its private label products.”

San Antonio, Texas-based H-E-B racked up estimated private label grocery sales of $3.2 billion in 2010, putting it at No. 15 on PLBuyer’s exclusive list of North American private label retailers.
When it comes to its private label, H-E-B is one of the few retailers that isn’t afraid to strategically commit to its private brands, says Durham. “They leverage them to innovate and speak to customers in unique and relevant ways.”
In April of 2011, H-E-B expanded its line of private label pure cane sugar sodas in response to consumer demand for more products made with natural sweeteners instead of high-fructose corn syrup.
Additionally in 2012, the company rolled out for consumers the “Healthy at H-E-B” initiative, which it described as a “comprehensive, long-term commitment to improve the health of Texans and provide them with fresh, healthy food that is affordable and easy to prepare.”
H-E-B also launched a new price comparison campaign early in 2012 which promoted newly reduced prices on several H-E-B brand and national brand products.

Midwest Region
St. Louis-based Schnucks is raising the bar for private brand marketing and promotion by committing close to four full pages of its flyer to its private brands, according to a blog post last fall on the Web site.
“This is a great way to reinforce the private brand, differentiate from competitors and enhance price-value image,” says Hauptman. “Highlighting private brands in the ad helps Schnucks capture shopper credit for its budget-stretching private brand options.”
Schnucks also has used some unique marketing campaigns when it comes to its private labels, such as the “Schnucks Brand Adventure” contest that gave shoppers a chance to win between $100 and $5,000 for each of the retailer’s private label products found discovered in their homes.
The retailer has also been using social media to help promote its private label products. Last fall, Schnucks unveiled “Wednesday WoWs!”-a coupon promotion accessible via its Facebook page. Each Wednesday, Schnucks uploads a new set of coupons that shoppers can print within 24 hours and redeem in-store. The first set of coupons delivered after signing up feature all Schnucks private label products.

Chesterfield, Mo.-based Dierbergs also has some unique ways it markets and promotes its private brands. Dierbergs Everybody Cooks magazine comes out every August, November, February and May and includes recipes that use Dierbergs private label products.
Dierbergs also offers cooking classes at several of its locations and has published a series of cookbooks that include recipes using its private label products.
“Our cooking schools use more of the Dierbergs brands as staples in their kitchen (sugar, flour, cooking oil, etc.)," says Todd Vasel, assistant director of marketing & advertising. "This dual purpose direction is intended to help build the brand, and serve as a more economical resource for often used kitchen ingredients.”

West Region
West Sacramento, Calif.-based Raley’s in 2011 launched a new private label brand called Raley’s Tonight, a new line of ready-to-heat, packaged, fresh-prepared gourmet meal entrees, in order to cater to the convenience factor it seems consumers are looking for these days.
“Success with private label will be driven-in part-by retailer ability to offer innovative products under their private brand that meet the ever-changing needs of their shoppers,” says Hauptman. “Raley’s is on the right track in branding its own solutions to its shopper needs.”
In 2010, Raley’s celebrated its 75th anniversary by introducing several private brand exclusives and an anniversary cookbook that “featured over 75 of our best recipes and tips from Something Extra magazine.” Product introductions included Double Delight Extra Premium Ice Cream, 75th Anniversary Blend Nob Hill Trading Co. Coffee, Claire’s Classic Potato Salad and a Honey Bourbon BBQ Pulled Pork Sandwich-an Ozark-style sandwich created in honor of Arkansas-born founder Tom Raley.

In honor of its 75th anniversary in 2011, San Bernardino, Calif.-based Stater Bros. launched a yearlong campaign that included a range of products on sale for 75 cents.
The retailer also markets and promotes its private brands heavily in its weekly flyer, as seen on the company’s Web site. On the front page of the flyer, Stater Bros. rib-eye steaks were featured as were Stater Bros. brand toilet paper. On the inside pages, many private label products were featured including Stater Bros. brand ground beef, chicken breast, shrimp, ground beef patties, lunchmeat, bacon, cheese, apple juice, macaroni and cheese, pancake mix, non-dairy creamer, syrup, rice, bottled water, pretzels, pet food and supplies and more.

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