The trend of consumers switching to private label brands appears be alive and well, Janney Capital Markets analyst Jonathan Feeney writes today, noting that private label brands keep gaining market share from traditional brands.
Cereal sales are struggling, Feeney writes, as volume dipped 4.1% in the past four weeks, although price and mix boosted sales by 5.7%, leading to overall sales growth of 1.6% year over year. Kellogg (K) is apparently willing to swallow rising input costs in order to gain markets hare, Feeney writes. “At the margin, this has negative implications for General Mills’s (GIS) future margin levels.”
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