Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
Issue link: https://specialtyfoodmagazine.epubxp.com/i/912382
Winter Fancy Food Show Booth 1278 South Carolina, and Virginia. The company reportedly has plans for locations stretching from Texas to New Jersey. "The continued growth of these retail- ers is driving action from competitors in two key areas—pricing and private-brand devel- opment," says Stewart Samuel, program director at research firm IGD in Vancouver, B.C., where he oversees North American research. "Retailers have been sharpening their pricing and promotional approaches, shifting more investment into everyday low pricing and reducing the number of deep price-cut promotions." Retailers also have been simplifying their promotional mechanics and messag- ing, favoring fewer but more impactful pro- grams, he says. Neil Stern, senior partner at consulting firm McMillan Doolittle, Chicago, says pri- vate label overall appears poised for growth in the era of Aldi and Lidl expansion. "Not only do you have Aldi and Lidl growing, but you have supermarkets like Kroger and Walmart that are going to respond to that by growing their own pri- vate label," he says. Cincinnati-based Kroger Co. recently said it would focus on growing its special- ty private-label lines, including its organic and natural Simple Truth and its Private Selection assortment of gourmet products, while Bentonville, Ark.-based Walmart's Jet.com division recently introduced its first private-label line, Uniquely J, targeted toward urban millennials. Specialty food manufacturers will have to decide if they want to partner with retail- ers to supply their private-label products, if they don't do so already, says Stern. Shifting Upmarket Retailers can either choose to compete with Aldi and Lidl on price, or they can seek to differentiate themselves from these low- price retailers by shifting upmarket, says Shelley Balanko, senior vice president, The Hartman Group, Bellevue, Wash. "We perceive the latter strategy as a better option because there is more growth to be had in the premium/specialty seg- ment, which has been growing at 10 percent year-over-year for the past decade," she says. Adopting a more upscale/specialty positioning won't necessarily inoculate traditional retailers against the pressures of lower-priced operators, however, notes 54 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com