With a sagging economy, Americans are opting for smaller, more affordable housing than in the past. Some retailers are adjusting to this trend by introducing new store formats and private label should jump at this opportunity, according to a new video report by Brad Edmondson on PLMALive!
Edmonson explains that high fuel costs and loss of household wealth are among the reasons forcing Americans to tighten their budgets. Many are descending upon smaller households in urban areas that are closer to work, entertainment and retail stores.
Wal-Mart has taken notice and is developing its Neighborhood Market store format. While the store is only one quarter of the size of a Wal-Mart Supercenter, it’s still significantly bigger than typical convenience stores. The Neighborhood Market will focus heavily on basic items and according to Edmondson there might be a higher proportion of private label in these stores than in a Supercenter. Wal-Mart is also planning to increase the number of Neighborhood Markets because they are cheaper to build and more profitable.
Several new communities are being developed around the country that offers easy to reach retail centers to their residents. These retailers are focusing on the basic grocery and drugstore items. This coupled with the growth of Wal-Marts new stores give private label a great opportunity to come up with innovative new products to sell in competition with the national brands.