Private-label merchandise sees dramatic sales increase
Grocers continue to ring up sales across their private brands, but supermarket operators have some challenges ahead.
Sales of private-label merchandise has dramatically increased in the past year, hitting $138 billion across multiple retail outlets and convenience stores in the United States. Supermarket operators single-handedly rang up $68 billion in private label sales in 2017, according to data from the Food Marketing Institute (FMI) and IRI. The data was revealed in the first half of a four-part series, called “The Power of Private Brands from the Register 2018.”
While this was a slight decline of 0.1% for supermarkets, private brands represent 16.4% of dollar sales in the grocery channel and 14.8% across multiple retail outlets and convenience stores.
According to data, 69% of consumers said it’s very important, or somewhat important to have a good assortment of private brands in food and beverage. Generation X is responsible for 31% of all dollars spent on private brands across all outlets, compared to 19% each for older Millennials and younger boomers.
Private brands also influenced 46% of consumers in their choice of where to shop in 2017. However, this can also work against supermarket operators going forward, as retailers outside of the grocery channel, such as mass merchants, dollar stores and club retailers, are all out-performing supermarket operators when it comes to private brand sales. For example, private label is driving 1.6% growth across these three categories, according to the study.
One culprit could be that trips per buyer are down in the grocery channel, and most likely these shoppers are going to other retail channels, such as mass and club, the study revealed.
Sales could also be impacted by grocers pulling back their private label advertising. A year ago, retailers seemed to be promoting too much, as a percent of sales on promotion was up. In fact, private brands increased promotions about twice as much as the overall food business.
“Grocery retailers might need to consider whether they have pulled back too much on promotions,” the study said. “If things were different, reduced promotions might be a healthy response. However, under the circumstances, retailers probably want to examine whether more price and display activity would be successful in advancing their store brand cause against mass, club and other channels.”
Southeastern Grocers donates more than 3.6 million meals to Feeding America
Southeastern Grocers’ customers and associates joined forces to help combat hunger in their local communities by raising nearly $218,000 through an in-store hunger relief program.
The Jacksonville, Fla.-based retailer, who also is the parent company of Bi-Lo, Harveys, and Winn-Dixie, partnered with 25 Feeding America local food banks and provided more than $150,000 in fresh produce and shelf-stable products to food insecure communities, the company said.
“We want to recognize and thank our generous customers and associates for their contributions to this important cause through our Feeding America partner food banks,” Anthony Hucker, president and CEO of Southeastern Grocers, said. “We care passionately about the deep impacts of food insecurity in our communities and we were proud to implement the Hunger Relief Program to raise funds in our stores, provide meals through mobile pantries and food donations to serve those who struggle to put food on their tables, especially over the summer. We are committed to being a company that our associates, customers and communities can always count on.”
Southeastern Grocers’ foundation also activated a two-week, company-wide hunger relief program that ran from June 27 to July 10. The program allowed consumers to donate during checkout and associates the opportunity to volunteer with food banks at mobile pantries throughout the Southeast.
“Thank you Southeastern Grocers for engaging the community to fight hunger,” Matt Knott, president of Feeding America, said. “The summer is a key time to support families in need. By utilizing their customers and associates to raise awareness and funds, SEG continues to be a critical partner in the fight to end hunger for their communities.”
Dollar Tree’s distribution network continues to grow
Dollar Tree has opened the doors to its 23rd distribution center, and another is on the way.
The company’s newest facility is located in Warrensburg, Missouri. The distribution center will service the 11 of the company’s stores located across 11 Midwestern states.
Dollar Tree invested approximately $110 million in the facility, according to the company.
The discounter also recently broke ground on its 24th distribution center in Morrow County, Ohio, scheduled to open in summer 2019. This new facility will be 1.2 million sq. ft., and is expected to create 400 new jobs in the local community.
Both buildings will bolster the retailer’s distribution network, which shipped and received more than 1.7 billion cases of merchandise in 2017.
Dollar Tree operates nearly 15,000 stores across the United States and five Canadian provinces.