The Empire Strikes Back

In recent years as sales and unit share of private label products grew the national brands largely shrugged their shoulders, expressing a laissez faire attitude and outwardly showing little concern about consumers and their reactions to higher prices.

Well, things are different today and the growth store brands have enjoyed in recent years is now more than just a blip on the radar screens of national brands.

Recently, in my role as consumer, a few things caught my eye while shopping. While the following examples could be isolated events, my senses tell me they’re the beginning of a trend. 

The empire may be ready to strike back.

A resident of Pennsylvania, I was shopping at my local Giant store and a Hellmann's Mayonnaise deal caught my eye. The 30-ounce jar normally priced at $6.99 was discounted to $5.99 with a $3 digital clip coupon on top of that. It’s been quite some time since I’ve walked out of the grocery store with a jar of Hellmann’s for $2.99. For comparison, Giant’s own brand mayo is usually priced at $4.69.

I was a mayo snob for many years, but the growing price difference between Hellmann’s and various store brands (Aldi, Lidl, Target) made me try the private label product from each of those retailers and break away from my long-standing devotion to the national brand. Price led me to change. Quality of the store brands kept me coming back and kept more money in my pocket.

But this deal was too good to refuse. I believe consumers, when presented with the same product (or better) at a lower price, should buy the one that is less expensive. This sends a message to retailers and product suppliers alike that we, the shoppers, will not be ripped off.

The second incident happened at Costco. Needing canned tuna, I automatically grabbed the Kirkland eight-pack of cans that has been a long-standing purchase. Again, price is key, but also knowing which rather large tuna supplier provides the canned product to the wholesale club, I know this is a quality product.

Hold the phone!

On this day, Costco was offering a digital coupon that brought the price of the Bumble Bee canned tuna 8-pack below the price of the Kirkland-brand product. Using the aforementioned rationale, the Kirkland product went back on the shelf and the Bumble Bee tuna was in the cart. 

As we move forward, one-off specials from national brands and their overall pricing structure will be a fascinating watch. I expect more deals as the big brands and their deep pockets work to lure back consumers. 

At least for me, buying a jar of Hellmann’s that was on sale won’t change my habits. I now know the high quality of similar store brands, as do many consumers, and the lower prices of those quality products will make the purchase decision easy. 

Some also view certain store brands as brands, and getting shoppers to change their habits and move away from a product they enjoy based on what’s in the package and not the brand on the outside of the package will be difficult. And remember, many retailers in recent years have done a great job of developing proprietary products as part of their private label assortments. 

Could we see the big CPGs replicating private label products in an effort to compete?

Wouldn’t that be something?