• by Karl Greenberg , November 28, 2008

Dallas-based 7-Eleven, Inc., the convenience-store chain, is launching private-label products nationwide this month under the 7-Select label.

The new packaged-goods line--launched in May in test markets--now comprises 32 items such as cookies, candy, nuts, potato chips, beef jerky, trail mix, chocolate-covered pretzels, coffee espresso beans, raisins and peanuts.

The company says suggested retail prices offer a 10% to 20% savings for customers versus the national brand equivalent.

The program actually began in 2004 with paper goods, batteries and water, but the new range of products takes 7-Select well beyond the bottled water and paper goods products that usually define convenience store private brands.

In May, 7-Eleven began a pilot program to offer the new private-label snacks, candy, nuts and cookies in 1,500 stores in Florida and the Mid-Atlantic area, promoting via in-store displays. Of the original 31 items first tested, 26 were selected for the initial launch along with several new candy additions.

Says Tom Gerrity, the company's product director of processed foods: "The top five or six items are selling as well as branded products in units-per-store, so we have been very thrilled with our success in the pilot," he says.

The company will focus on promotions with display strategies. "For the most part it will be in-store in terms of aggressive presentation, with some creative point-of-sale to call out product value," he says, adding that the branded products will be shown together on end caps but also dispersed among fresh food and beverage displays. The company will promote the products with combination deals and storewide events with signage and grassroots efforts next spring.

Gerrity explains that while 15% to 20% percent of grocery store goods are private-label, "for convenience stores it has been around 3% and mostly in products like bottled water," he says.

Ironically, the economy offers an opportunity to build the private-label business because of lower price versus name brands. "There's high brand loyalty--56% of buyers are loyal to private-label brands, and 99% of households have such products," he says.

Per 7-Eleven, the private-label packaged and processed foods category is an $81 billion business across grocery, drug and mass merchandisers, and is up more than 10% in the past year.