Private Label May Be New Weapon Against Kosher Discounting

FROM KOSHER TODAY

Brooklyn – Kosher independent stores may very well take a page from the airline industry. Faced with a growing cadre of discount airlines, major carriers are joining the discount fray. American Airlines is launching a new cheaper “no frills” ticket to compete with the discount airlines. Concern that new discounters like Bingo will cut into their sales, several independent kosher grocers are considering fighting back by launching new discounted private label items. The business model of the new Costco-like Bingo supermarket in Boro Park is to limit the number of brand items sold combined with a variety of private label items, some severely discounted. The store is said to negotiate deals with certain brands in return for the exclusivity, thus enabling them to sell well-known kosher brands at a lower price. Limiting the number of brands also requires less store personnel in constantly keeping multiple SKW’s stocked.

According to kosher food sources, Bingo has already cut into the sales of kosher retail stores that are known for their lower prices. With news that Bingo is planning to expand this model to other communities, several kosher retailers told Kosher Today that they are considering introducing many new discounted private label items to “compete on a level playing field.” Although kosher food sources originally predicted that the Bingo store would be a natural destination for many Orthodox and Chasidic shoppers with larger families, manufacturers and distributors say that the store is attracting “all kinds of buyers.” They add that there is still a considerable base of kosher consumers that are extremely price conscious.