Hey, where’s my favorite deodorant ?

Bottom line: As retailers adjust to tight-fisted shoppers, many stores are shrinking the number of name-brand products on their shelves.

Don’t be shocked if you can’t find your favorite salad dressing or mouthwash on your next trip to Wal-Mart.

* * * * *

CNNMoney.com, Dumped! Brand names fight to stay in stores, Feb. 16, 2010 

Large retailers — including Wal-Mart, the world’s biggest — are wrestling with having too many types of brand-name products.

At the same time, shoppers are buying less and looking for bargains.

So unless a particular brand is a top seller in its category, it’s getting knocked off the shelf — and sometimes getting replaced by a cheaper store brand.

For example, Wal-Mart recently removed Glad and Hefty-branded storage bags from shelves, replacing them with its own lower-priced Great Value brand.

Those categories at greatest risk of losing brands are everyday-type purchases such as household products, toiletries and food staples.

These are also categories in which retailers have aggressively pushed their own house brands.

Moves such as this are significant given Wal-Mart’s heavyweight status in the retail industry.

“Any change that Wal-Mart makes with its product assortment has enormous implications for the entire industry.”

Wal-Mart is not the only one doing this,  leading drug store chains, including CVS and Walgreens, grocers such as Kroger, and Wal-Mart’s rival discounter, Target, are also looking to simplify their store shelves.

In good economic times, product variety is a must for retailers. But in down times, when shoppers aren’t buying much, variety can be a burden.

“I think the feeling is that as these companies keep extending their [product] lines, it’s only causing confusion for shoppers and not really driving them to buy more products.”

“If you walk into a Wal-Mart or another large retail chain, there are so many products on shelves that it does make it harder to shop.”

Besides cutting clutter, industry experts say Wal-Mart and other retailers are looking for more lucrative deals from suppliers on both prices and advertising.

“Perhaps one consideration in which product to cut is based on which company gives [Wal-Mart] the best deal.”

“In this recession, consumers have certainly become less discriminating with what they buy. Consumers have rushed to value prices, and they are buying generic brands.”

Retailers’ own brands have grown their market share by between 2% to 6% … and 77% of consumers who traded down to less expensive private label products are happy with their decision.

Full article:
http://money.cnn.com/2010/02/15/news/companies/walmart_dropping_brands/index.htm

One Response to “Hey, where’s my favorite deodorant ?”

  1. Ben Smith Says:

    Prof. Homa-

    I like your blog. I found it when I was checking to see how my own blog came up on google searches for info about Best Buy and Walmart.

    I am going to follow your blog and will link to some articles when we cross topics. Here is one recent example.

    http://retailleverage.com/2010/02/22/walmart-sku-reductions/

    I also saw an older article from you on Best Buy (post Circuit City) and thought you’d like this – insight from a former BBY SRVP on Circuit’s downfall:
    http://retailleverage.com/2010/02/20/circuit6fatalmistakes/

    Good luck.
    -Ben

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