Brands Not Willing to Work With Ahold Risk Private-Label Replacement

JULIE GALLAGHER

LAS VEGAS — Manufacturers that are unwilling to work with Ahold on strategies that will benefit both private-label and national brands risk having SKUs replaced by store brands at Stop & Shop and Giant-Landover, Jeff Martin, executive vice president of merchandising and supply chain at Stop & Shop/Giant-Landover, said here yesterday.

His comments were part of a panel discussion at Information Resources Inc.’s Reinventing CPG and Retail Summit. “Private label is here to stay, and it’s going to grow,” he said to manufacturer attendees. “You can either fight your way through it or figure out how to live with it … so either stay with us in supporting the brand, or private label will probably take its place.”

Trading partners that don’t heed Martin’s advice and work together on mutually beneficial promotions also risk forfeiting margin, acknowledged Rob Chumley, senior director of category strategy for the Kellogg Co. Moderator Thom Blischok, president of consulting and innovation at IRI, cited an example of a Phoenix retailer that positioned one facing of Kellogg’s Raisin Bran for $1.99 beside three facings of the store-brand alternative, three for $5.

“Any of the time we’re competing at the same time, for the same market segments, we’re both going to lose,” Chumley said.

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