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The Private Label Opportunity

LAS VEGAS — Convenience store retailers have a tremendous opportunity to grow their private label programs, but they must do a detailed assessment before diving headfirst, panelists stressed during Monday’s “Private Label Success” educational session at the 2015 NACS Show.

U.S. consumers spend $120 billion annually on private label products, with the market growing 2.1 percent per year, stated Patrick Neuman, president of Inside Brand Development. Convenience stores, however, only account for 1.8 percent of private label dollar sales and 2.5 percent of unit sales, trailing grocery stores, drugstores, club stores, dollar stores and mass-market locations.

“There’s no better time to get in than now,” Neuman told the crowd.

For those interested in jumping in, Bill Tencza, senior category manager for QuickChek Corp.'s 140 convenience stores, stressed that retailers must first determine why they want to add a private label program.

“Branding, profit, understanding product costs, vendor leverage, competitive advantage and customer value are all things you must look at it,” he said.

Which private label products c-stores want to sell is another factor that must be considered, the 25-year QuickChek veteran added. The quality of the product, price, size of package and number of SKUs are among the most important attributes to look at.

“You also want to know all costs including product, packaging and delivery,” Tencza said.


Once c-store retailers have a good footing regarding what private label products they want to offer, they should shift their attention to how to roll out the items. It’s important to create an in-store and digital advertising plan, according to Tencza.

Also critical is product placement. “The products need to be positioned right. People shouldn’t need to look around for it,” he said. “Some c-store retailers place their private label products directly next to the competing national brand so customers can look at the price difference. This approach has worked well in the past.”

Convenience store retailers can make excellent profits on private label products when executed effectively. Tencza closed with five key takeaways all c-store retailers must consider when taking the private label plunge:

  • Have a reason for each product category;
  • Have a strategy for each product;
  • Understand the driver for the product;
  • Have reliable vendor vetting; and
  • Know when to get out and have an exit strategy (if the private label offering is unsuccessful).

“Not everything is successful,” he concluded. “You can’t be scared to get out of a product if you have to cut ties.”

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