Private label sales increase as budgets tighten

NEW YORK Private label foods are making inroads as consumers’ budgets become tighter, Citigroup said Tuesday following a conference call with Tom Pirovano, director of industry insights for Nielsen.

Private label product sales have increased by 10.2 percent at drug stores, as well as 8.9 percent at grocery stores and 10.4 percent at Wal-Mart. Pirovano said during the call that Wal-Mart had become a benchmark retailer in private labels by keeping prices for its private label products low compared to branded products and private-label products from other retailers.

The shift to private labels has been most dramatic in foods that have seen the largest increases, such as eggs, milk and cheese. Sales were lower in processed foods.

At the same time, however, makers of branded food products have been trying to compete by adding extra features such as nutritional enhancements, changing quantities or making the products safe for the microwave.