The recession gave a big boost to private-label brands peddled by retailers- cheaper breakfast cereals, soups and soft drinks (among other things) that taste the same as big-name brands. The growth in sales is starting to slow: In the four weeks to May 16, “private label’s market share grew at an average 11%, a drop from the 21% growth those off-brand products saw at their peak around February,” DJN colleagues Anjali Cordeiro and Paul Ziobro report. Is this a sign consumers are feeling more confident and willing to buy pricier brands? Perhaps, but as happened following the economic downturn of the early 1990s, big-name brands will never recover the market share they had before the credit crisis. Fact is, when shoppers get used to store brands, they almost never leave them – even when their wallets and checking accounts fill up during an economic boom. Indeed, this is why consumer goods makers have been cutting prices recently in a scramble to keep shoppers coming back. Speaking of which, Anjali reports that Procter & Gamble will test a cheaper version of its iconic Tide detergent. “Tide Basic will cost roughly 20% less than the standard product,” she writes. What it won’t have is “the added fragrance technologies and other advanced technologies of the standard Tide.” Kroger Co. and Wal-Mart Stores Inc. will test the new product in 100 stories in the South. It will certainly be interesting to find out if shoppers detect a difference between premium-price and cheap Tide. If they don’t, I doubt P&G will let us know. Tide, P&G’s No. 1 North America brand, generates more than $3 billion in annual sales. Here’s Anjali’s piece:
http://online.wsj.com/article/SB124648188584882481.html
