Let There Be Light
By John J. Pierce

Walgreens gets into compact fluorescent bulbs with packaging made from recycled paper.

Light bulbs may be the brightest thing going in private label consumer electronics. Specialty retailers offer flash drives and more.

This 2-pack will save $184.50 in energy costs,” proclaims a front-panel message on W brand 23-watt compact fluorescent bulbs from Walgreens, Deerfield, IL. Yes, Walgreens is going green… well, more like olive drab; the packaging is made from naturally tan recycled paper.

Store brand light bulb sales were $80.3 million for the 52 weeks ended 3/22.2009, according to Information Resources, Inc. (IRI), Chicago, IL. That was a dip of 1.5%, but the category as whole was off five percent, with unit sales off more than 12% in both national and store brands. Private label share was 15.2% in dollars and 22.8% in units.

Compact fluorescent bulbs (CFBs) like Walgreens’ remain the cutting edge of the category, despite recent complaints that they don’t always last as long as advertised and present disposal problems because of their mercury content. Walgreens, which also offers 13 watt CFBs promising savings of $112.80, advises consumers to consult www.lamprecycle.org about disposal, and also bases its energy-saving claims on a life cycle of 10,000 hours at 12 cents a kilowatt hour, versus 1,000 hours for standard 60-watt bulb.

Under the traditional Walgreens brand, there are traditional bulbs–plus specialty decorative, chandelier, bath & vanity, ceiling fan, even microwave oven bulbs (Under the Living Solutions brand, there’s even an LED night light.). CVS, Woonsocket, RI, offers a similarly wide range under the RTH (Round the Home) brand, including CFBs in single, double and four-packs. Kroger, Cincinnati, OH, largest supermarket chain in the country, uses the Everyday Living brand for CFBs and traditional bulbs, plus night lights, globe lights, floodlights and appliance bulbs. Topco Associates, Skokie, IL, has a similar line under the Electrix brand.

Consumer electronics right now, as always, is a volatile market for private label. Single-use analog cameras and film, once the bedrock of the segment, continue to decline in sales although major retailers still carry them. A few offer single-use digital cameras, but that segment hasn’t grown. Mainstream retailers have been in and out of blank CDs, DVDs and printer cartridges–and that last category seems to be in decline even at office supply stores like Staples, Framingham, MA, and Office Depot, Del Ray Beach, FL.

Trutech CD players and armband radios were seen on clearance recently at Target, Minneapolis, MN. The discounter’s website lists 20 other items now available under that brand, including digital picture frames, clock radios, DVD recorders and various accessories. But Target hasn’t offered private label cameras or film for several years.

Office Depot recently emulated a tactic of mainstream retailers, offering five-count trial sizes of its private label blank CDs at checkout for only 99 cents. But it has also gotten into flash drives under the Ativa brand: prices start at $19.99 for a 4GB, and are $34.99 for 8GB and $67.99 for 16GB. Staples prices its flash drives at $12.99 for 2GB, $24.99 for 4GB, $39.99 for 8GB and $69.99 for 16GB. At Best Buy, Richfield, MN, prices on Geek Squad flash drives are $14.99 for 4GB, $24.99 for 8GB and $78.99 for 16GB.

Over at the Wall Street Journal, Miguel Bustillo and Christopher Lawton noticed April 27 that Best Buy had been expanding its private label electronics offerings. But among the “new” items they mentioned, those Geek Squad flash drives have been out for a couple of years now (Logos on some seen in April were stickered over with “Summer Academy Geek Squad,” to promote a summer camp for junior geeks.).

Still, the Journal had real news about the strength of private labels at the consumer electronics chain: sales of store brands were up 40% for the 52 weeks ended 2/28/2009, whereas overall sales sank–despite the fact that the demise of Circuit City last year gave Best Buy a virtual lock on the market. And, as they note, private label electronics is “an area that has historically flummoxed U.S. retailers.”

Popular products at Best Buy, the Journal reported, include a global-positioning system with Google Inc. search capabilities, a high-definition radio receiver that displays names of songs, and stripped-down digital picture frames without pricey extras such as music-players. But Best Buy had to recall 13,000 of its 26-inch Insignia TV sets when a couple of them caught fire; a portable power device also turned out to be a fire hazard.

Dynex is the most visible private brand at Best Buy, where it is used for a raft of items like those digital picture frames, memory card readers, digital video cables, LCD screen cleaners, case fans, PCI cards and surge protectors. “Retail experts believe the largest U.S. electronics chain by sales could further distance itself from competitors if its exclusive electronics lines develop the type of brand loyalty Sears enjoys with its Kenmore appliances and Craftsman tools,” the Journal said.

What may still be a unique program is Speak Out pre-paid cell phones at 7-Eleven, Dallas, Co., and pre-paid phone cards to go with them. The phones range from $50 to $110, and include camera versions. They are pre-charged and ready to use right out of the box. Phone cards for extending service come in $25, $50, $75 and $100 denominations.

In a far more mainstream category, alkaline batteries dominate the battery category, with private label sales of $210.4 million over the last year, up 13.6%, according to IRI. Zinc batteries are showing more modest growth, and other types are in decline.