LAS VEGAS — Displaying private-label items in a horizontal pattern on a shelf just below national brands has resulted in a 30% increase in own-brand sales at Des Moines, Iowa-based Hy-Vee, according to Jon Tisch, director of supply chain sales and merchandising for Daymon Worldwide, St. Cloud, Minn.
Speaking last week at a workshop here during the 26th annual convention of the National Grocers Association, Tisch said the horizontal pattern made it easier for consumers to find what they were looking for and enabled the chain to display point-of-purchase material at eye level.
Daymon markets private-label lines. Tisch said the horizontal merchandising pattern contrasts with the more traditional method of displaying private-label items to the right of the national brands.
The Hy-Vee display was a test, he noted, “and we're now trying to convince additional stores to move to horizontal placement of own brands.”
Sharing the stage with Tisch was Leo Braido, director of sales and marketing for Riesbeck's Food Markets, St. Clairsville, Ohio, who told the workshop audience he prefers to stick with the more traditional merchandising pattern for private-label products.
“We use a combination of block sets, in a vertical set, top to bottom, and displays to the right,” Braido explained. “And given that we have long-term relationships with our vendors and don't just change our shelf sets, we would have to see very tangible results [of an alternative merchandising pattern] to change,” he said in response to a question.
“There's more than one right way of doing things, and no one-size-fits-all plans,” he said.
Braido said a retailer must make a commitment to a private-label program, not to a price. “Quality and value are timeless,” he said. “We want to sell products we are proud to sell, and private label aligns with that strategy.”
Riesbeck's carries the Our Family line from Nash Finch Co., Minneapolis. Braido said Our Family has a penetration of between 12% and 20% at the 15 Riesbeck's locations, “which compares with only about 8% five years ago, when we were primarily a national-brand organization,” he pointed out.
Riesbeck's private-label sales rose 27% last year, he said, “which helped us compete with eight Wal-Mart supercenters in our trading area.” He said he anticipates another double-digit increase in private label this year.
