STOP & SHOP REVS UP OWN BRAND PACKAGING

RUSSELL REDMAN

BOSTON -- In what some observers say is preparation for the upcoming Select premium private label, Stop & Shop here is promoting the new packaging design on its existing store-brand groceries.

Advertising for the upgraded label design has recently appeared in newspapers, coupon books and circulars. For example, the second page of one coupon book read "Introducing! A Great New Look!" and "An Extensive Variety That Just Keeps Growing." Some newspaper coupons bore a graphic that said "Look For Our New Label."

Featured products included cookies, crackers, soda, pickles, bread crumbs, cereal, cranberry and lemon juice, olive oil, spring water, sugar and whole-bean coffees.

Observers say the packaging redesign is necessary to reinforce the store brand's shelf presence for the coming of the Select premium line, due to appear in Stop & Shop stores this summer. Safeway, Oakland, Calif., will supply the products.

"What you have to do when you have two private-brand programs is you have to differentiate the two products," said Mark Husson, an analyst at J.P. Morgan Securities, New York.

To compete with the premium label, the store brand's visibility must be raised without making consumers think its quality is equal to or better than the upscale line, Husson explained. "You have to do a bit of a face-lift," he said. "It, [the store brand] has to look good, but it shouldn't look splendid, so people don't get confused."

The new Stop & Shop brand packaging, introduced in mid-1994, was necessary to comply

with the Nutrition Labeling and Education Act, said Mary-Jo Anderson, a spokeswoman for the chain. "We took advantage of that to totally revamp our packaging," she explained.

Besides more comprehensive nutritional information, the upgraded labels have a unified design in each product category for easier identification, according to Anderson. "It's more consumer-friendly," she said. More products are due for repackaging. "We're complete with all foods, and we're starting with the nonfood," Anderson said. She declined to provide details about the timetable for the process and the products involved.

Anderson also declined to comment about whether the chain's new store label was in response to Select. But she did say the company aims to increase shelf space for its store-brand items. "We're always growing our private-label line," she said. Last year, private-label items were 21.5% of total grocery sales at Stop & Shop, according to J.P. Morgan research.

When asked if Stop & Shop's new store packaging was preparation for Select, Edward Comeau, an analyst at New York-based Lehman Bros., said, "It has to be."

"It's consistent with what a lot of other retail companies are doing," he said. "Now a lot of food retailers are trying to improve their private-label presence." That is being accomplished, he said, by brand consolidation and label design enhancements that boost quality orientation.

A Boston-based industry source said he didn't think Stop & Shop's new store packaging stemmed from Select.

"Obviously, like everyone else, they're trying to improve the image and visibility of their private label, and packaging plays a major part in customers' perception of the product," he said. Overall, new private-label designs have been sorely needed, according to Comeau. "The packaging side has been pretty lame for most companies," he said.