Private Label Buyer
Focus on Merchandising: ECRM Insights

Price Savings Help, But Quality Also Drives Spring Sales

July 3, 2013

Spring sales of private label deli and frozen items were up this year from the same time in 2012. According to the most recent data from IRI, sales in both categoriesFocus on ECRM showed strong private label gains as share rose between 2 percent and 5 percent in each category from the previous year.

So what was behind the trend? Was it simply a seasonal spike or was there something more that retailers were doing to push their private label products?

According to an analysis by the Efficient Collaborative Retail Marketing company, promotions for private label frozen items were slightly below last year’s levels for the 52-week period that ended May 18, while private label deli promotions rose slightly from last year.

Both, though, were well above the top national brands promoted over that period. In frozen items, private label products accounted for 19.6 percent of all promotions in the category. The top national brand, Tyson, was at 2.44 percent, with Stouffer’s at 2.35 percent.

On the deli side, private label promotions accounted for 31.2 percent of promotions in the category. The leading national brand was Fresh Grocery at 18.1 percent, then Boar’s Head at 5.4 percent.

Looking at another measure, called True Ad Block Count, ECRM found that the frozen private label ad support year over year was just below its peak in March, and climbed again in May. The measure provides a way to count products that are featured in an ad block in addition to those promoted separately.

On the deli side, promotions year over year were around average trend levels in March and April but spiked toward May to its second-highest level of the year.

What’s that mean? It means that the amount of promotions for private label in the frozen and deli categories were relatively similar to the same time a year ago. Yet sales and private label share of sales rose in those categories this spring.

So although the promotions were not significantly increased overall, sales were higher, suggesting consumers were searching for private label items in those categories whether they were promoted or not.

Why? In the frozen category, the retailers with the top promotions for private label pushed better price points as the differentiation, in between 67 percent and 72 percent of the ads. On the deli side, the gap was smaller between promoting better price points or offering deals of X amount of products for one price.

So if price point was the main differentiator, which retailers took advantage of the opportunity to push their own products? On the frozen side, Aldi led the way with 8.9 percent of its circulars devoted to private label frozen products. But Wegmans, Fresh & Easy, H.E.B. and Vons were among the top 10 retailers, not the discounters you might expect pushing price points.

On the deli side, specialty and regional retailers again dominated the list of top private label promotions in circulars. Names such as Heinen’s, Delhaize America’s Sweetbay and Hannaford, Wegmans, Publix and Harris Teeter were among the top 10 list.

That lends credence to the thought that on the deli side, it was the unique items provided by retailers with strong programs already in place that helped drive sales in the spring.

 For the frozen foods, having discounters, large retailers and specialty retailers among the list showed the difference that a combination of price point and perceived quality could make in pushing private label sales forward.