Americans and Private Label

I am getting a little bored with the coverage of the success of private label in the US. No offence to them. I am sure it is big news there.

But the rest of the Western world has been through it. Private label penetration in Europe is almost double that of the US. Retail brands are trusted. Often they are not value options but in the case of Tesco's Finest or Marks and Spencer considered better quality. Partly because retailers have been far more consolidated in those markets and were able to build their brands.

I read today that dollar stores is the one channel in the US that brands are not facing private label competition. Cold comfort really. I recall in the early 1990's before I left the UK you could go slumming and buy national brands at discount grocery stores or you could get quality private label at the national retail chains. Not a great position for brands to be in.

American brands need to face up to a new reality. This will not go away with economic recovery. Why should it? They need to start thinking about their value.

Drivers of Changing Trip Types

According to Stuart Rose of Marks & Spencer in the UK "People's purses are being squeezed," he said. "A seismic shift [in shopping habits] is going on."

He blames very poor performance of M&S on not only economic factors but specifically fuel prices and that people are shopping locally rather than at out-of-town shopping centres to avoid using gas.

I am not sure how this will net out but we should expect to see a shift in trip types driven by a myriad of factors - including fuel prices.

Although I am not sure of the impact in Canada of fuel prices on shopping habits. The average distance driven for a stock up trip is 7km in total. That would cost about $3 in gas - an increase from $2 prior to the increase in prices. I am not sure if people are that sensitive to gas prices - unless of course the motivation is emotional and the simple act of driving causes pain.