Store Brands Impacting Medium-Sized Retailers

The importance of store brands business to major retailers like Wal-Mart and Kroger is well-documented, yet store brands are also having significant penetration on the medium-sized retailers, according to Roy White in a new report on PLMALive. In his report, White focuses on a three medium-size chains throughout the country; one is Ingles, a North Carolina based chain consisting of 203 stores across six southern states. Over a nine month period ending in June, Ingles increased sale 2.4% to over $2.7 billion. Store officials have attributed this growth partly to gains in private label sales. Weis markets, headquartered in Sunbury, Pennsylvania, saw its corporate sales increase 5% to $2.7 billion during 2011 and increased profits by 10.7% over that same period. Part of this success was attributed to Weis' comprehensive private label program which includes gourmet products, natural products and health and beauty products. White also talks about Fred's Super Dollar, a Memphis based chain operating over 700 stores. The stores are mainly geared to low, middle and fixed income households and are located in lightly populated areas. During the 2011 fiscal year, Fred's generated sales of $1.9 billion and earnings of $33 million and store brands had a 19% penetration in that time span. The value that store brands can offer to lower income households is a key reason this chain continues its store brand expansion. While the success of store brands in major retailers is well known, it is very encouraging to store brands have a great impact on the smaller retailers as well. Such success can offer store brands manufacturers even more opportunities to expand.