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Safeway Talks Recovery In Private Brands

May 31, 2013
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Speaking before the 2013 Citi Global Consumer Conference this week, Safeway Senior Vice President of Finance and Investor Relations Melissa Plaisance talked candidly about the progress the retailer had made in its private brands in recent years.

She talked about missteps the company made in sodas and in its value tier that since have been corrected.

“We’ve had a lot of change in private brands, under (Senior Vice President of Consumer Brands) Joe Ennen,” she said. “A lot of innovation.”

And that was in need she said, starting with soda.

“We had lost our way in soft drinks,” she said. “We’ve gotten our way back by unifying the whole category under the Refreshe label.”

Plaisance added that Safeway improved in recent years in its value tier products, particularly with the launch of Pantry Essentials.

“Although we’ve spent the last couple of years looking at the value consumer … created Pantry Essentials and have expanded that across the store … we didn’t cover that very well prior to this downturn,” she told the audience. “And I think we’ve done a much better job understanding end-of-the-month behavior, when people are running out of money you gotta run some specials that … cater to that customer.”

That also equated to premium or specialty competitors such as The Fresh Market, which Plaisance was asked about in the question-and-answer session of the conference.

“On the premium side … we didn’t up our game for a couple years there, and that’s something we’re working on very clearly with our premium clusters,” she said. “And it’s a matter of adding a number of SKUs, whether it’s in deli and organics and even bakery, where just by adding 20 SKUs to a certain category, you can really keep a shopper in your store.”

With the database of information from Safeway’s loyalty program and Just For U initiatives, Plaisance said targeting the right consumers was a major benefit for the company.

“So we’re really trying to look at the demographic, understand who our competition is, and then change the mix within the store,” she said. “And it’s a modest change, it doesn’t cost a lot to add SKUs, but you really have to know who your shopper is in a particular area. Both on the high end and the low end.”

Plaisance also spelled our two other private labels’ performance, the Snack Artist line and Eating Right.

“We created a whole new snack line called Snack Artist with really fun packaging that’s all resealable,” she said. “Consumers really liked that, that was an innovation that wasn’t available in our marketplaces.

“And O Organics, Eating Right … Eating Right is being completely redesigned. And we’re focusing around certain customer needs, whether that might be high protein or gluten free. … Having a private brand in (gluten free) I think will make a real difference.”

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