Private Label's Role in a Well-aligned Pricing Strategy

January 25, 2011
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Continued private label expansion is one key aspect of retailers’ 2011 plans to formulate a consistent merchandising strategy and consumer experience based on quality and value, says a just released survey report. 

Expanding the array of consumers’ private label options is a strategic priority for more than 30 percent of retailers surveyed for the just-released ninth annual “Retail Horizons: Benchmarks for 2010, Forecasts for 2011” report from the National Retail Federations’ research and education arm, the NRF Foundation, and KPMG LLP, the U.S. audit, tax and advisory firm.

The number of retailers implementing nationwide pricing and markdown strategies is increasing, this year’s study indicates. The trend could point to the growing role that value-based pricing plays in gaining share of wallet, the study’s authors say. Seen thus, private label can be part of a well-aligned pricing strategy based on quality and value, which, according to the survey, is retailers’ number one concern today.

“The economic turbulence over the past year created a renewed cash consciousness on the part of shoppers and retailers alike,” the report states. “While retailers used the period to slough off waste, shoppers made it clear that value for money was top of mind. Those sentiments are likely to persist even as the economy regains traction. As retailers respond, merchandising and pricing strategies will play an increasingly critical role.”

The challenge for retailers will be balancing the demand for value and keeping prices down, the report says. While sales and price cutting appeal to budget-minded consumers, the industry must be mindful of the risk of promotional fatigue as well. Given the ongoing climate of uncertainty, more predictable, value-based pricing may be more reassuring for consumers, the report’s authors conclude.

This year’s edition of Retail Horizons includes responses from 135 North American retail companies and more than 318 individuals responding on their behalf. The report documents retailers’ key business priorities and plans, and tracks established and emerging retail trends.

For more information on the report, please go to

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