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Although some experts are forecasting that national brands will rebound as the recession eases this year, a retail analyst expects store brands to keep gaining market share, the Private Label Manufacturers Association’s PLMA e-Scanner newsletter reported.
Citigroup analyst Deborah Weinswig said that this year would be a “breakout year” for private label growth. “We believe that there will be another growth spurt in 2010 for private label and exclusive products as retailers cater to the growing demand for these products and better merchandise these products in-store to appeal to the consumer,” she noted in a report.
According to Weinswig, food retailers were engaged in a “modern-day price war” last year, but now an “old-time price war” will begin, spurred by Walmart’s major price cuts. “We view this move as a game-changer in the food retail industry in 2010,” she said in the report. “As a result, there likely will be further price investments from food retailers and gross margin pressure as they scramble to match Walmart’s aggressive pricing in 2010.”
New York-based PLMA represents over 3,000 companies involved in the manufacture and distribution of store-brand products.