DEERFIELD, Ill. -- National brands sell better during the holidays than private-label products, according to a survey conducted by Efficient Market Services here.
Over Labor Day weekend this year, EMS found that slightly more than 67% of dollar sales of the top 100 selling items were national brands, compared with 57% the weekend before the holiday.
Within the top 20 items, 59% of the dollar sales over the weekend were national brands; that number had only reached a little more than 47% the weekend before.
Using daily scanner data, EMS has studied the sales during four holidays -- Memorial Day and Christmas in 1993, and Independence Day and Labor Day this year -- in Atlanta and Columbus, Ohio.
Real time information is collected from the scanners of about 2,000 stores at the close of business each day. As of August 1994, participating retailers include Kroger Co., Pathmark, H-E-B Grocery Co., Homeland Stores, Abco Foods, Save Mart, Eagle Food Centers, King Soopers and Dillon Food Stores.
David Filos, marketing analyst at EMS, gave two causes for these numbers: national brands were usually supported by holiday-themed promotions and consumers want to have recognizable product names on display for guests.
"During promotional weekends, national brands that are promoted heavily usually come with a price reduction of some sort, which lowers the price comparable to private label. Consumers, keeping all things constant, will normally go for a brand when the price is the same as the private label because it's perceived as being a better product," he said.
"Brand marketers should pay attention to promote as much as possible out the door on these weekends," he added.
In the Atlanta market over Labor Day, 11 of the 12 top-selling brands were running promotions in at least half the stores. For brand marketers, who depend on these four holidays to give them a good percentage of their annual sales, the lesson may be to push holiday promotions.
The effectiveness of such promotions is clear, but it's not the issue, said Barry Kotek, managing partner of Retail Systems Consulting, Naples, Fla. He questioned marketers' rationale. Deep promotional price cuts may seem effective in the short term if brand share is gained, but that is not a long-term growth strategy for helping brand marketers maintain share.
"If you pick up five percentage points during this heavy promotion period, and then you lose those five percentage points when you're not promoting, what have you done?" he asked.
"So you're losing big money on 100% of your volume in order to pick up an incremental amount of sales, but you lost all that margin. If you're selling more because you're promoting, but you're making less on the total amount that you've sold, you're probably not as well off as if you were selling less and making more," he explained.
For the other weeks of the year when there are no holiday sales to depend on, marketers must simply rely on the distinctness of their brand.
