P&G Goes Online to Combat Private Label Growth

Published on January 15, 2010 | Comments: 0
Leading CPG manufacturer The Procter & Gamble Company (P&G) is partnering [pdf] with e-commerce services provider PFSweb, Inc. to pilot an online store later this month. Named the eStore, the online shopping site will be owned and operated by PFSweb and exclusively feature P&G products to consumers in the U.S. Procter & Gamble, which has experienced reduced global sales volume and market share in the past year, plans a full launch of the eStore in spring 2010, following a pilot of the site with 5,000 consumers that will begin in the coming weeks. P&G initiated the eStore concept and has been working its ideas for test concepts and programs with PFSweb. Product pricing, promotion, shelving and distribution will be at the sole discretion of PFSweb. P&G says it will work closely with PFSweb to identify new concepts, programs and marketing efforts to test via the eStore.

Supermarkets, Discounters, C-Stores Turn to Private Label

Major retailers in the supermarket, discount and convenience verticals, which represent the majority of P&G’s U.S. sales channels, are expanding their private label assortments of grocery and CPG goods. Yesterday, supermarket retailer Supervalu said it plans to reduce the number of items it sells in stores by as much as 25% in order to make room for more private-label goods. And in the past 12 months, supermarket chain Safeway Inc. expanded the reach of its private label “Eating Right” food products by selling them through other retailers, and mall-format grocery chain Fresh & Easy launched a private label brand of prepared meals. United Supermarkets, operator of 50 Texas-based supermarkets, took a direct step into the private-label food arena in August 2009 by purchasing Praters Foods, a Texas-based prepared foods provider. United reportedly plans to develop synergies between its own private label and Praters brands. Outside the supermarket/grocery vertical, discount retailer Wal-Mart is significantly expanding its Great Value private label grocery/consumer product brand, and discount retailer Target Corporation has rebranded and expanded its private-label assortment of grocery and CPG goods under the “up & up” banner. Regional discount chain Meijer relaunched its Meijer Gold line of private label CPG food products, with more than 80 grocery items, in November 2009. In addition, convenience chain 7-Eleven also grew its 7-Select line of consumer and grocery goods last year.

Private Label CPG Sales Show Unit Growth

Flat consumer prices have been hindering dollar sales growth of private label CPG goods in recent months, but unit sales growth has been healthy. According to research firm The Nielsen Company, during the four-week period ending November 28, 2009, annual private label dollar sales of prepacked, UPC-coded CPG goods declined 0.5%, while annual unit sales of prepacked, UPC-coded CPG goods increased 2.8%. Fresh produce, alcohol and packaged meat were the top three departments in private label CPG unit sales growth.

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