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CEOs Praise, Attack Private Label

February 8, 2011
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While drugstore chain CVS is seeing private label growth, national brand executives continue to bash private label.

While drugstore chain CVS is seeing private label growth, national brand executives continue to bash private label. Below are comments from recent quarterly earnings calls for CVS, Kellogg and Unilever:
 
“Throughout 2010, we introduced about 1,100 new private label items to better serve our value conscious customers, and we continue to see healthy growth in private label sales. In the fourth quarter, private label, as a percent of front store sales across the chain, increased 50 basis points to 17.8 percent, for the year, increased 120 basis points to 17 percent.” – Larry Merlo, CVS Caremark, president, CEO, director, and president of CVS Pharmacy -- Retail

 

“Malt-O-Meal is being aggressive out there, and it seems to be coming at the expense of private label. And if you look in the fourth quarter, private label share was down 40 basis points and down 50 basis points for the full year. So I think there's an issue there really between what we call the price-lead segment, we think about Malt-O-Meal and private label together." – John Bryant, president, CEO, and director, Kellogg

 

“I’ve always said a certain level of inflation is healthy. People are worried… is there an acceleration of private level growth? The reality is there is no private label really in the emerging market, where we have a very big part of our business.
 

“In the developed markets, it’s anywhere around 15 percent to 20 percent on average in the markets that we compete in and we have not seen that trend significantly change -- not in 2007, not in 2008, not after that, not now. You’ll get monthly reports that have little movements and people get excited of that, but that trend is fundamentally not changing. Brands that do that work well, that innovate, that support, can continue to grow in any environment. And that’s where we plan to be.” – Paul Polman, CEO, Unilever

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