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Walgreens unveils value-focused store brand
August 18th, 2011
Most Nice! products will be on shelves early next year, Walgreens reported.
DEERFIELD, Ill. – Pushing ahead with a store-brand makeover, Walgreen Co. has launched a value-oriented private label called Nice! in its drug stores nationwide.
Walgreens said Thursday that Nice! will include more than 400 grocery and household products at prices up to 30% less than national brands. The chain noted that many items in the line "go beyond what might be expected from a drug store brand," such as soup, sauces and bakery items.
Plans call for most Nice! products to be on Walgreens store shelves by early 2012, and the retailer expects to continue adding more items to the brand's lineup over the next few years.
Also on Thursday, Walgreens said that in recent months it has changed the brand name and packaging of the DR Delish premium private label — picked up with the acquisition of Duane Reade — to Good & Delish and expanded the selection of the line's snacks and beverages. Walgreens introduced DR Delish snacks and beverages in its stores last August, which began the retailer's efforts to refine its store-brand program, and has since rolled out more items in the popular private-label line.
The Nice! brand sports a bold, clean design to be easily recognizable and simplify the shopping experience, according to Walgreens. The chain said current store brands such as Cafe W, Deerfield Farms, W and others will be phased out and transitioned to Nice!.
Walgreens noted that the change is its latest step in its plan to revamp private-label business, including the consolidation of many of the brands in its existing portfolio. Citing A.C. Nielsen consumer research, the chain said 75% of Walgreens shoppers buy private brands at its stores.
"Store brands have always been a core part of our business. With more shoppers seeking value in this economy, we've been able to attract new customers across every income level to our brands and maintain their loyalty with a focus on quality and assortment," Joe Magnacca, president of daily living products and solutions at Walgreens, said in a statement. "Now with the launch of Nice!, we are streamlining our offering to make it even easier for customers to identify high quality everyday essentials at a great value."
So far, consumers have responded well to the more than 20 products already on shelves in many stores, including dry grocery items such as tea, dried fruit, rice and macaroni and cheese, Walgreens said.
The retailer plans an integrated marketing campaign to build on the Nice! brand's quality and value message versus national brands, as well as to spotlight the label's wide assortment of essential items available at local Walgreens stores. Besides store signage already under way, the drug chain also is slated to kick off a national marketing campaign next year to drive awareness and spur product trials. Employees, too, are being engaged to become Nice! brand ambassadors.
"With the consolidation of brands, and the additional products we will roll out under Nice!, we expect it will become a leading brand," stated Moe Alkemade, divisional vice president and general merchandise manager of private brands at Walgreens. "Our store brands are no longer just the value option, they are the smart option."
The new label gives Walgreens two distinct tiers for its store-brand program: the Nice! label for customers seeking value, and Good & Delish for shoppers wanting premium-level products without a high price tag.
"The Delish brand gives our customers snacks and beverages with premium recipes but at more affordable prices," Alkemade noted. "This brand further differentiates us from other major retailers."
This year, Walgreens also launched a national marketing campaign to promote its Walgreens brand health and wellness products. The retailer said that label will continue to be used for health and wellness items, which include over-the-counter medicines, vitamins and supplements, first aid supplies and sun care.
Walgreens added that it also has augmented its petshoppe brand of pet supplies, growing from 10 items to more than 60 this year. New packaging and more prominent placements within stores will make it easier for pet owners to find value, according to the retailer.
"We believe we will continue to build loyalty to our stores and our brands as shoppers find favorites on our shelves that will become staples in their everyday lives," Magnacca commented. "We are confident that our more refined approach will provide a new level of simplicity and choice, which is the ultimate value objective for our core customer."
Total U.S. private-brand sales have risen from $64.9 billion in 2005 to $88.5 billion in 2010, according to Nielsen data reported by Walgreens. The chain said Nielsen identified households with incomes over $100,000 as fastest-growing consumer segment for store brands.
In drug chains, private-label dollar volume rose 4.7% in 2010 to $6.5 billion, accounting for a 14.7% dollar market share, up 0.5% versus the previous year, according to Nielsen data in the Private Label Manufacturers Association's 2011 Private Label Yearbook. Private-brand unit volume in drug chains, though, dipped 0.6% last year to about 1.8 billion, and unit share tailed off 0.1% to 16.2%, PLMA reported.