In the coming year, millions of Americans will gather with their families around the table to share meals. Most won’t remember the number of food recall notices of 2012, but this remains top of mind for retailers.
Any given grocery retail store will face between 75 and 100 recalls every year. This, along with the fact that these companies are often the direct line of communication for consumers, puts retailers on the front lines when it comes to food safety. They are the ones responsible for ensuring that recalled products are removed from shelves and providing information to consumers. But what happens when one retail chain is mentioned more often than others in news reports of recalls? Should this be a cause for concern?
While it may appear that some grocery chains are experiencing a higher than average number of recalls, their stores may not be involved in more recalls than any other retailer. In fact, Stericycle ExpertRECALL’s Third Quarter 2012 Index showed that nearly one-quarter of those companies who reported a recall were plagued by more than one event.
The difference is that private label brands may be more well-known among a specific retailer’s customers and receive more attention. While, in the case of a recall of private label brands, the producer or manufacturer is generally at fault, it’s the brand name or the retailer’s name on the product that typically takes the reputational hit. That’s why owners of private label brands should take precaution when putting quality controls in place for their supply chain partners.
When it comes to recalls, retailers that have their own private label brands are responsible for managing the full “reverse logistics” process. While grocery stores are held accountable for the execution of some of these tasks, the stakes increase when it’s a private label product
A retailer’s ability to effectively manage recalls will determine the impact on its brand and reputation. And adequate planning can help prevent companies from having to issue more than one recall in a short period of time.
The difficulty that retailers have experienced as a result of recalls of their own brand products reveals the extra risk and liability facing private label manufacturers. Especially given the current challenging economic times that lead many Americans to purchase private label brands.
Sales growth for private label products, combined with a stringent regulatory landscape, are increasing the risk for retailers responsible for protecting store brands. With store brand dollar share at an all-time high, consumers have more store brand products in their homes.
With this in mind, it is imperative that retailers pay attention to store brands to ensure brand equity while also continuing to pay attention to food safety issues and leveraging their access to customers to the fullest advantage.