Think you can hide from slumping U.S. consumer spending behind shares of traditionally steady staples companies such as General Mills (NYSE: GIS) and Johnson & Johnson (NYSE: JNJ)? Perhaps, but it could pay to think outside the proverbial box.
At this point, the cat should be out of the bag: Grocers and other retailers are pushing their own labels as value alternatives to the pricier brand names on the next shelf down. The trend isn't limited to low-income shoppers, either. From Wal-Mart Stores ' (NYSE: WMT) Great Value brand to Whole Foods ' (NYSE: WFMI) 365 products, consumers have trade-down options across the price spectrum.
How serious is the private-label threat? The table below details the recent market-share growth of private-label/store-brand goods within the consumer-packaged-goods (CPG) universe.
Trends
Q1-07
Q2-07
Q3-07
Q4-07
Q1-08
Q2-08
Q3-08
Q4-08
Private-label unit share
21.2%
20.9%
21.6%
21.8%
22.3%
22.6%
Private-label $ share
16.1%
16.0%
16.5%
16.8%
17.0%
17.4%
17.5%
U.S. unemployment rate Continued...