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Brand Names Making a Comeback

NEW YORK -- Consumers appear to be slowly returning to big-name brands after fleeing to lower-cost, private labels in the past year. Store brands rose 3.2 percent at retailers for the four-week period ended Feb. 20, the Wall Street Journal reported, citing a new report released by Credit Suisse analyst Robert Moskow.

Store brands account for roughly 20 percent of unit sales of food, excluding sales at Walmart Stores Inc. But the February increase was down from a 4-percent gain in January and a roughly 6-percent gain, excluding dairy, last July, according to the report.

At the same time, branded-food unit sales rose 2.4 percent for the February period compared to a 0.2-percent decline for the four weeks ended Jan. 23. Moskow said the gains could be due to shoppers stocking up on items before and during the recent winter storms.

Brand name food and consumer goods companies have been offering more coupons and other discounts to regain shoppers that have opted for less-expensive private-label products. Executives from H.J. Heinz Co. and other food companies have recently said they hope more promotions -- not price increases -- will help drive sales this year.

Last week, Del Monte Foods Co. Chief Executive Richard Wolford said the company is winning back some market share from private-label. In addition, Steve Burd, Safeway Inc. chief executive officer, said last week that the supermarket chain's private-label sales are still stronger than those of branded companies. However, the private-label growth is "maybe not as strong as in previous quarters," Burd said, noting his chain has already noticed the increased promotional activity from branded-food companies.

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