Private label sales increase as budgets tighten
NEW YORK Private label foods are making inroads as consumers’ budgets become tighter, Citigroup said Tuesday following a conference call with Tom Pirovano, director of industry insights for Nielsen.
Private label product sales have increased by 10.2 percent at drug stores, as well as 8.9 percent at grocery stores and 10.4 percent at Wal-Mart. Pirovano said during the call that Wal-Mart had become a benchmark retailer in private labels by keeping prices for its private label products low compared to branded products and private-label products from other retailers.
The shift to private labels has been most dramatic in foods that have seen the largest increases, such as eggs, milk and cheese. Sales were lower in processed foods.
At the same time, however, makers of branded food products have been trying to compete by adding extra features such as nutritional enhancements, changing quantities or making the products safe for the microwave.
Hershey tuning its ears to customer comments, sets plan for long-term net sales boost
HERSHEY, Pa. The Hershey Co. said it will announce its plan for meeting long-term for net sales goals and increasing earnings per share growth today. The company said that a new plan was developed after Hershey completed a market structure/category segmentation review. The company will also realign its plans to focus on the interests of key consumer segments to help drive growth.
Hershey said it is readjusting its resources and plans to beef up its advertising by about 20 percent in 2008 and 2009. A focus will be directed on core brands currently generating around 60 percent of the company’s U.S. net sales.
“Our extensive consumer research validates our strategy of increasing advertising and consumer investment behind the core U.S. brands that offer the greatest potential for growth,” David J. West, president and chief executive officer said. “We will combine this focused approach with consumer-centric innovation and continued international expansion to achieve our long-term net sales growth rate of 3 to 5 percent. Longer term, as marketplace trends improve and targeted consumer initiatives are executed, the Company expects to generate earnings per share growth of 6 to 8 percent.”
Hershey has said that it estimates its total net growth for 2008 to be at around 3 to 4 percent. Earnings per share were expected to be around $1.85 to $1.90. Hershey’s management planned to discuss the new strategy and long-term goals at a meeting with investors earlier this morning.
Stop & Shop partners with USDA on healthy eating program
QUINCY, Mass. Customers at Stop & Shop will encounter some encouragement to eat well under a new partnership between the supermarket chain and the Department of Agriculture.
As part of the partnership, part of the USDA’s “Partnering with MyPyramid: Corporate Challenge,” Stop & Shop stores will have signs such with slogans such as “Vary Your Vegetables” and “Make Half Your Grains Whole.” The chain will also encourage customers to use interactive features on MyPyramid.gov to influence their eating choices.
The Corporate Challenge seeks to create partnerships between industry and the government to promote healthy eating. It is based on MyPyramid, the USDA’s updated version of the original Food Pyramid.
Based in Quincy, Mass., the Stop & Shop Supermarket Company operates 59,000 stores in New England, as well as in New York and New Jersey.