BROOKINGS, Ore. -- C&K Market here has increased sales of its private-label health and beauty care line by using endcap displays, shelf extenders and newspaper ads.
"Private label is a very important part of our HBC," said Dan Van Zant, the 30-store chain's HBC/general merchandise buyer-merchandiser. "Our sales right now are running at about 5.2% private label to total HBC sales and it's growing all the time. We've got a lot of private-label items that outsell the national brand."
In its eight largest stores, C&K has "full 3-D or three-sided endcaps of HBC private label that we promote," Van Zant said.
The promotional items are placed on adjustable endcap shelves, which are 4 feet deep and 4 feet wide. There, the product mix is changed "on a cycle every four weeks or every six weeks," he added.
"The endcap promotions [on private-label HBC] all have themes that are worked out on a semiannual basis," he explained. "For example, we'll run a theme of private-label dental care for 30 days, then a theme of private-label light bulbs, and then during the peak of cold season, we'll have a display of cough-and-cold private label."
Van Zant said these themed promotions have been very successful at C&K's eight largest stores over the past year but did not fare as well at medium-sized locations.
sales. Once a quarter, C&K runs a full-page ad highlighting private-label HBC, and pushes one or more private-label HBC items "at least twice a month" in regular chain advertisements.
The chain has shown its commitment to private-label HBC, Van Zant said, by adding true depth and variety to its line.
"For every national-brand product with a private-label equivalent, we make sure to carry that private-label product. Then we promote the national brand and promote the private label right alongside it," he noted.
"We're constantly getting new items. Of course, it's hard to come up with space. In our larger stores, we have the room and we can accommodate 100% of the private label that's made available to us," Van Zant continued. "But in the smaller stores, we're not going to eliminate a one-of-a-kind national brand or our one single stockkeeping unit of a national brand to get the private label in."
Ironically, a recent price increase in its private-label HBC line has also contributed to booming sales, he said. Previously, consumer confidence in C&K's Western Family private-label HBC line had sunk, said Van Zant, because it was priced 45% to 50% lower than national brands.
"This sent out a mixed message to our customers that maybe something was wrong with our private-label products because they were so cheaply priced," he said.
About six months ago, the chain decided to counter this problem, and raised private-label HBC prices to a ratio of 25% or 30% lower than national brand prices. "This didn't hurt our sales and picked up our gross," Van Zant added, saying the chain gets profit margins of "about 35% to 40%" on its private-label HBC line.
C&K does not want all its customers to switch to private label, however, Van Zant added. "What brings the customer into the store are the national brands and their advertising," he explained. "The customers we want to switch to private label are, quite frankly, the ones that might go someplace else to purchase their HBA because of price. For them, our private label is the alternative."