Branded foods gain

March 10, 2010

According to The Wall Street Journal, consumers appear to be slowly returning to big-name brands after fleeing to lower-cost, private labels in the past year. Store brands rose at a slower 3.2% pace at retailers for the four-week period ended Feb. 20, according to a March 4 report released by Credit Suisse analyst Robert Moskow. Such brands account for about 20% of unit sales of food.

The increase is down from a 4% gain in January and a roughly 6% gain, excluding dairy, last July. At the same time, branded-food unit sales rose 2.4% for the February period compared with a 0.2% drop for the four weeks ended Jan. 23. Moskow said the gains, in part, could be due to shoppers stocking up on items before and during the recent winter storms.

Brand name food and consumer goods companies have been offering more coupons and other discounts to regain shoppers that have opted for less expensive, private label products. Executives from H.J. Heinz Co. and other food companies have recently said that they hope more promotions—not price increases—will help drive sales this year.

The Wall Street Journal article (subscription required)