Walgreens officially kicks off Nice! launch

Chain refining private-label business

DEERFIELD, Ill. — Walgreens on Thursday officially unveiled its new store brand, Nice!

"Store brands have always been a core part of our business," stated Joe Magnacca, Walgreens president of daily living products and solutions. "With more shoppers seeking value in this economy, we've been able to attract new customers across every income level to our brands and maintain their loyalty with a focus on quality and assortment. [And] now with the launch of Nice!, we are streamlining our offering to make it even easier for customers to identify high-quality everyday essentials at a great value."

The new brand will include more than 400 high-quality grocery and household products at prices up to 30% below the prices of other national brands. Walgreens plans to have most Nice! product on its shelves by early 2012, including many that go beyond what might be expected from a drug-store-brand, such as soups, sauces and bakery items.

Nice! features a bold, clean design aimed at being easily recognizable and simplifying the shopping experience. Current store brands, including Cafe W, Deerfield Farms, W and others, will be phased out and transitioned to Nice!, Walgreens stated. The change is Walgreens' latest move in its strategy to build its private-brand business, including the consolidation of many of the brands in its existing portfolio.

In addition to store signage already under way, the drug store chain will launch a broad national marketing campaign planned for next year to drive awareness and generate trial. Employees also are being engaged to become brand ambassadors for Nice!. "With the consolidation of brands, and the additional products we will roll out under Nice!, we expect it will become a leading brand," said Moe Alkemade, Walgreens divisional VP and general merchandise manager of private brands.

According to A.C. Nielsen data, total private-brand sales in the United States have increased from $64.9 billion in 2005 to $88.5 billion in 2010. The fastest-growing store-brand consumer segment is households with incomes more than $100,000. Nielsen consumer research also found that 75% of Walgreens shoppers purchase store brands in Walgreens.

"The Nice! product line compared favorably to respective national brand competitors in consumer testing," Alkemade said. "And the sleek new packaging garnered rave reviews, which is expected to promote trial of the new products."

The Nice! unveiling is the next step in Walgreens' efforts to refine its private-brand business, which began a year ago with the introduction of DR Delish products. In recent months, the company has tweaked the brand's name and packaging, now Good & Delish, and bolstered the selection of the line's premium snacks and beverages. "The Delish brand gives our customers snacks and beverages with premium recipes but at more affordable prices," Alkemade said. "This brand further differentiates us from other major retailers."

Walgreens this year also launched a national marketing campaign promoting Walgreens-brand health-and-wellness products. The Walgreens label will continue to be used for health-and-wellness products, which include such items as over-the-counter medicines, vitamins and supplements, first-aid supplies and sun care.

Walgreens also has enhanced and expanded its Pet Shoppe brand of pet supplies, growing from 10 items to more than 60 this year. New packaging and more prominent placements within stores will make it easier for pet owners to find value. "We believe we will continue to build loyalty to our stores and our brands as shoppers find favorites on our shelves that will become staples in their everyday lives," Magnacca said. "We are confident that our more refined approach will provide a new level of simplicity and choice, which is the ultimate value objective for our core customer."

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