Safeway Puts Pressure on Private-Label Brands

Pleasanton, Calif. Safeway plans to push its private-label brands harder if branded-food makers don't start lowering prices on their products, according to The Wall Street Journal.

Chairman, president and CEO Steve Burd told analysts in an earnings conference call that the sales-growth gap between national brands and private-store brands has become "extraordinary" and accused food makers of being "disingenuous" with consumers by not dropping their prices to reflect declining input costs, the report said.

"Although some national-brand vendors have rolled back prices, others have said they will hold the line," Burd said.

Those companies that have not cut prices will "end up seeing market-share declines," Burd added, noting that the gap in growth between corporate brands and national brands is 1,000 basis points, "the biggest spread in modern times."

Consumers have been dining in and avoiding restaurants amid the down economy, and are also gravitating more toward private-label goods at the grocery store.