Many of the UK’s biggest grocery chains are enhancing their own-label ranges, placing increasing pressure on national brands.
Morrisons, the supermarket group, is currently undertaking a major overhaul of its private-label stable, making up 45 per cent of its sales, and the first such effort for four years.
Richard Hodgson, Morrisons’ commercial director, suggested its new “family of brands” would be “different to anything you’ve ever seen in the UK”.
“We think it’s oversimplified and there’s a better way to present to customers,” he told Bloomberg.
A project by rival operator Sainsbury’s is also underway, covering the 6,500 offerings within its mid-price “By Sainsbury’s” assortment of products.
This portfolio helps Sainsbury’s differentiate itself, while rotating 25 per cent of items each year also means “customers don’t get bored and go elsewhere”, Mike Coupe, its group commercial director, said.
Such an objective has become particularly important as greater promotional activity among national brands means their prices are now a “lot closer” to the discount alternatives, Coupe continued.
Waitrose, a high-end chain, introduced its in-house Essentials range in 2009, and intends to add 3,500 new variants to this stable in 2010.
The organisation’s mid-tier collection is also undergoing a transformation programme, in an attempt to boost sales.
“We’re very focused on being differentiated and own-brand clearly allows you to do that,”Rupert Thomas, Waitrose’s marketing director, said.
The initial round of activity – covering a selection of meat, fruit and vegetables – has achieved “some good success,” he added.
At present, 54 per cent of Waitrose revenues can be attributed to private label, with the “Essentials” portfolio on 18 per cent overall.
Rod Street, an analyst SymphonyIRI Group, the research group, predicted this trend would continue to gain ground.
“Retailers are doing a lot more on own-label, it’s an important part of their mix, especially as competition increases,” he said.
“In an awful lot of categories, own-label has been pushed back simply because the acceleration of promotions means national brands are much cheaper.”
Indeed, research firm Nielsen has estimated that around 39 per cent of branded products on sale in UK supermarkets are available on some sort of deal.
Source – Warc