Private lines have domestics depts. covered - discount store private label brands

Discount Store News, Oct 4, 1993

The increasing importance of private or captive label goods in discount store domestics departments was dramatically illustrated in this year's Top Brands research.

Kmart's Martha Stewart label finished a strong fifth in mention rates among discount store managers (due, predictable, to strong support from Kmart managers), while Target's Merona, Country Estates and Furio labels, Kmart's Color Classics, and Wal-Mart's Common Sense label also received mentions. Of those, only Merona and Martha Stewart had ever received mentions in previous years.

Meanwhile, mention rates for national brands, including even the dominant Cannon label, slipped across the board, again reflecting the surge in private label prorams at major national and regional discounters.

Another significant trend was strong mentions for window treatment vendors such as Newell, Kirsch and Kenney, all of which placed in the Top 10. Discounters have only recently made major commitments to the category, particularly in merchandising, signage, and depth of selection, and that commitment seems to be paying off in better sales performance, which attracted the attention of store managers.

While Cannon dominated the category again, the research indicated a chink in the powerful brand's armour: upscale regional discounters. While two-thirds of Wal-Mart managers and over half of Kmart managers identified Cannon as a top performer, only one in four upscale regional managers named the brand. Instead, upscale regional discount chains tended to prefer Springs. Despite a slight dip in mention rates overall, Cannon's dominance of the category actually became more pronounced as mention rates for its nearest competitors (Stevens and Pepperell) slid even further.

However. Stevens' slippage can be seen as a vindication of the company's strategy to concentrate on store labels like Merona, Color Classics, Furio and Country Estates, all of which it either produces or collaborates on. If those labels, in addition to associated labels like Taste Maker and Gloria Vanderbilt, were considered, Stevens' mention rate actually rose from one in five managers a year ago to about one in four.

St. Mary's was the major loser in the category, dipping from almost one in five managers mentioning the brand in 1992 to less than one in 20, and Cannon Mills' other major label, Fieldcrest, also dipped, dropping off the Top 10 list. [TABULAR DATA OMITTED]

The proliferation of private and captive labels, as well as designer labels like Stevens' Gloria Vanderbilt, seems to have hit hard former Top 10 brands such as Fieldcrest, Burlington, Dan River, Dundee and Thomaston Mills, all of which just missed the cutoff.

Managers said that, overall, they didn't see an increase in brands in the domestics department, with only about 1% reporting such an increase, among the lowest such numbers storewide. Similarly, the managers didn't seem to be aware of that many brands in the department; on average, they named only 1.6 brands when asked for examples of top performing brands in the department. That compares to an average of 2.5 brands in other departments.