STORE BRANDS EXPECTED TO NEARLY DOUBLE AT GENUARDI'S

MARYELLEN LO BOSCO

NORRISTOWN, Pa. -- Genuardi's Family Markets here expects to almost double sales of its store-brand products this year through 400 new product introductions and increased sales of established items.

The 26-store chain plans to debut store-brand cat and dog food, ice cream novelties, French fries, olive oil, dish detergent, laundry detergent, paper towels, napkins, soups and microwave popcorn.

"We can support a more highly developed private-label program. [We had] the sufficient projected volume to develop packaging and enter into supply agreements with manufacturers," said Frank Puleo, director of nonperishable merchandising for the stores.

Genuardi's currently has 400 store-brand items, including sugar, canned and frozen vegetables, pancake mix and syrup, cake and brownie mix, ready-to-serve frostings, mustard, mayonnaise, peanut butter and jellies.

"We [have store brands] in some very conventional commodity categories, but we also have quite a few items in less typical categories," said Puleo.

The chain began its own private-label program in earnest in June of 1995, and has been strengthening it since. In addition to this year's entries, the retailer plans to add another 400 products in 1998. The store brands replace private-label products under the Marquee and Richfood labels from wholesalers Fleming Cos., Oklahoma City, and Richfood Holdings, Mechanicsville, Va., respectively.

In accounting for the program's success, Puleo said, "We're sticklers for quality in every aspect of our business, and customers naturally trust our Genuardi brand products." Selections in the mix are priced 20% to 30% lower than national brands, according to Puleo. Comparison ads feature Genuardi's products against national brands and highlight the savings and comparable quality.

"We also run feature advertising to promote trails, just like the national brands do," Puleo stated. In addition, Genuardi's private-label offerings get comparable display space as do the national brands.

"They're merchandised next to each other to allow the customer an opportunity to compare and evaluate savings. We have shelf tags promoting the price difference," Puleo added.

Until Genuardi's finishes building its brand program, it will continue to use Richfood and Marquee private-label products to compete against the national players.

"These brands do nicely for us," noted Puleo, "But we find that our customers trust the Genuardi brand more than any control brand we carry. Our sales on Genuardi brands outperform the sales of the wholesaler control brands that they've replaced."