With loyalty in mind, private brands go upscale

In recessions, people tend to seek out inexpensive goods. In the most recent recession that should have been a boon for low-end private label.

But a funny thing happened: People started looking for better private-label products and they have continued to do so.

It’s no wonder then that more grocery chains are adding more premium private-label lines.

Some chains have adopted a three-tier strategy with good, better and best lines. A good example is Loblaw’s three brands: No Name (good) President’s Choice (better) and black label (best).

Premium private label may be more than just another product choice for shoppers. It might actually be a clever store loyalty scheme.

“When shoppers find something they really like, they have to go to that store to get it, says Jeff Weidauer, vice-president of marketing and strategy at shelf marketing company Vestcom.

Premium strategies vary but some chains are opting to distinguish their high-end private label by giving the products their own branding and name. Kroger, for instance, uses the name Private Selection.

“It helps to build in the shopper’s mind that it’s a ‘real brand,’ if you will, and not a private label,” Weidauer told the Shelby Report.

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