SWEETWATER, Texas -- Lawrence Management Services here is giving added exposure to its Marquee health and beauty care private label by double-facing selected items at its IGA and Fiesta Foods' stores.
The double facings of Marquee items, set wherever possible, have enabled the retailer to boost HBC private label sales by 20% to 30%, said Walter Smith, nonfood supervisor for the chain.
The move to increase shelf space for the store brand was intended to give the higher margin private label greater prominence on the shelf and boost profits in the HBC category.
So far the chain has increased facings of some 50 items. A high-volume segment such as analgesics has garnered three facings and additional floor shippers on the HBC aisle.
"We're aggressively pushing store brands to try and double the facings of the faster turning selections, mainly analgesics, cough and cold, stomach remedies and dental care," said Smith.
Smith explained that space for private label is being gained at the expense of national brands. "If ibuprofen had one facing in our private-label brand and the national brand had two, we are reversing that and giving the national brand a single facing and the Marquee label two facings," he said.
"The 30% to 40% profit margin private-label HBC affords us is much higher than what we can make on national brands," Smith said. "We carry 150 or so Marquee HBC items, which get good customer acceptance at our stores. It does really well."
According to Smith: "By swapping space we're making more gross profit, and it's working better for us. The store brand carries 10% to 20% more gross profit over the national brand. We must compete against the lower profit margins Wal-Mart and the discounters use in HBC."
The retailer also is making managers aware of the swing to store-brand HBC. "Most of them came through grocery, and to many nonfood is like a side department. "We want to make managers more conscious of the department and what and how much we sell," Smith said.
"Our shoppers are still buying as much national brands," he said. "There are still people who will buy Tylenol or Advil only, where the price-conscious customer will buy the store brand.
"We're holding our national-brand customer while making the store-brand HBC mix more impactful for the price-conscious customer. We're using signing that calls attention to the store brand, shows the price comparisons and the savings."
In some cases, according to Smith, "the savings in purchasing the store brand is substantial and can be as high as $3 over buying an Advil."
Smith said that private label represents 25% to 30% of Lawrence Bros.' total HBC sales, and HBC sales are about 10% of total store sales.
Of the private-label phenomenon Smith said: "It's moving up. We're just trying to swing them in that direction."