According to Nielsen, the number of shoppers buying less expensive brands is increasing from 23% in December to 35%. Stop & Shop, Shaw’s, and Whole Foods are responding by more heavily promoting their less expensive store-brand, or private-label, products.  “Some of the typical behaviors we see when people are feeling pinched is they do use coupons and they buy more private-label products,” said Judy Chong, spokeswoman for the West Bridgewater-based Shaw’s.

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Wal-mart will open Marketside grocery stores around “premium” offerings such as “meal solutions”. Market side grocery stores will be smaller in size and will focus less on price as opposed to rival Tesco-owned Fresh & Easy chain.

Retail giant Wal-mart has built its business around the low-price strategy. This strategy has been especially successful now during the economic downturn. During this past May, same-store sales excluding fuel rose 3.9 percent compared with the year-ago period. Not bad considering other retailers are closing doors and struggling with sales.

Given the current economic situation, is now the time to open “premium” stores?