Tops’ private label products are getting an extreme makeover to make them look less “cheap.”
In an attempt to make them more appealing to customers, Tops is changing the packaging on all of its Tops brand products. The grocer’s buyers and private label partners conducted research on customer perception of its store brands.
The feedback was not flattering.
“The way it was packaged didn’t match the product’s quality,” said Katie McKenna, Tops spokeswoman. “The perception was that it was lower quality and cheap. And something being a good value and being ‘cheap’ are two very different things.”
The change affects all 2,400 Tops-brand products – from trail mix, butter and oatmeal to trash bags, toilet paper and plastic wrap. Products started hitting shelves in June and will continue to roll out over the next 2½ years.
Private labels, which have increased in quality over the past several decades, pay off for consumers and retailers alike. Despite typically being priced between 20 percent and 40 percent lower than national brands, they are, on average, about 10 percent more profitable than name-brand goods. They also allow stores to negotiate better deals from brand manufacturers and help to build loyalty among customers, according to researchers at the Tuck School of Business at Dartmouth College.
Tops’ private label overhaul is the grocer’s first high-profile change since several top executives bought the company from a private equity firm in December. Most of the new packaging shows a close-up photo of the product in front of a wide, solid-colored band displaying the product’s name and description. At the top are photographs or artwork that depict either some of the product’s ingredients or a scene meant to “evoke a time and place,” McKenna said.
For example, Tops brand Classic Trail Mix displays a picture of a mountainside, while its Hidden Veggie Penne Rigate depicts a basket of fresh vegetables.
The rollout will include new flavors and varieties of existing products, such as its new cheddar and horseradish potato chips, and the launch of new products, such as Tops’ ice cream sandwich, fruit ice bar and sundae cup frozen novelties.
In some cases, Tops has developed different tiers of merchandise. While the company has retained and revamped its traditional Tops Premium ice cream, for example, it has also developed Tops Indulgence ice cream – a more luxurious-looking product meant to compete with higher-end national ice cream brands.
Product prices and sizes will not change.
“Providing customers with choices on what they buy makes Tops different than other retailers, and we do that by offering a wide variety of Tops brand and national brand products,” said Frank Curci, Tops president and CEO.
That statement seems to take advantage of criticism about the prevalence of Wegmans-branded products in Wegmans stores, sometimes at the expense of national brands or varieties.
“We have made a commitment to try to simplify shopping for our customers, and as a result, have eliminated some varieties that we previously offered,” said Michele Mehaffy, Wegmans spokeswoman. “We’ve also worked very hard to expand our offerings of Wegmans brand, knowing that our customers are looking for items that are high-quality and good value.”
The popularity of private-label goods began to grow during the economic downturn of 2008, and consumers have stuck with private labels as the economy has improved.
Since 2011, store brands have outpaced the growth of national brands, making up 23.4 percent of market share last year, according to the PLMA. In 2013, store brands accounted for $60.8 billion dollars in supermarket sales.
“It was widely opined that market shares for store brands could be expected to recede as consumer spending and purchasing returned to more normal levels and routines,” said Dane Twining, a spokesman for the Private Label Manufacturers Association. “But national brands have not been successful in reversing the well-established trends, and the growth of retailers’ brands continues.”