Private-Label GM on the Front Burner

MARK HAMSTRA

Among the new private-label GM products supermarkets are rolling out is a new Domestix cookware line from Topco, which is set to hit the shelves of five retailers in the coming weeks.

Chandler, Ariz.-based Bashas', one of the five Topco members who are introducing the new line, already had the product in its warehouse last week, Cathy Kennedy, GM category manager at Bashas', told SN.

The Domestix line, she said, will run 24 linear feet and will replace the national-brand offering from Ballarini/Epoca.

Kennedy said the price and quality of the new cookware line, which includes about 50 different items, led her to make the switch from a national brand to a store brand for those products.

“We have seen trade-off to our private label,” she said. “I wouldn't call it a trade-down, because the quality of the private label is equivalent to national brand, with better pricing for the consumers.”

And although Bashas' has always promoted its private-label GM products aggressively, in the current economy the company is open to new ideas.

“We are looking at several different ad strategies with private label that we haven't done in the past,” she said.

Bill Mansfield, president and chief executive officer at consulting firm VIP International, Garland, Texas, noted that more and more retailers are developing their own brands for cookware.

“The kitchen gadget category has historically been mostly a branded label,” he said. “Today, the retailer's need to drive both margin percent and sales dollars equates to using private label to accomplish this expectation.”

Debbie Deitke, who oversees the general merchandise brands at Skokie, Ill.-based Topco Associates, said the store-brand cooperative has been aggressively expanding its general-merchandise offering for the past three years. In fact, the new Domestix cookware line was developed in response to retailer requests after many retailers enjoyed success with Topco's Domestix bakeware line. Retailers are planning to launch the line with aggressive promotions, she said.

In 2008, Topco saw sales of its “X” general merchandise brands — which include Easy Clix cameras, Academix school supplies, Electronix and Domestix — rise about 15% in dollar volume, Deitke said, and sales have continued to “increase steadily.”

“What's driving that is that Topco has developed a very strong sourcing operation that is procuring almost all of our needs from overseas, so we are drawing product from the same factories that national brands are buying from,” she said, adding that retail prices average about 30% lower for Topco store brands.

After revamping the packaging on the Electrix line of light bulbs and batteries in September — a move Deitke said put the line ahead of some national brands — Topco is expanding the line next month to include extension cords, night lights and adapters.

“We are trying to give our members a complete solution, so they don't have to source from several different suppliers,” she said.