Will Private Brands Continue to Grow?

Over the last few years Private Brand has grown dramatically not only in the US but around the world, this report from Australia TNS’s blog the Sixth Sense ask the question on everyone’s minds, “Will Private Brand continue to grow in a healthy economy?” with a distinctly Australian slant to the answer.

Private label – wax or wane in the upturn?

In 2009, we ran a study on shopper consideration of private label products to look at consumer perceptions, attitudes and usage of these value-based offers during the GFC.  Since then, the economic climate has changed with stability and consumer confidence returning.  But does this mean that people have moved back to branded products, from their private label habits?  A study we conducted in June this year, found the majority had not.

When we first looked at this study we hypothesised that shoppers had a variety of attitudes towards buying private label.  Some were doing it to cut costs, others to display thrift, and some were even doing it despite an aversion to the private label offer as they felt they could ‘get away with it’ in certain categories.  We segmented consumers into six groups based on their attitudes and behaviours toward private label, which I discussed in a previous post.  To recap, the segments and their size a year on are displayed below.

These segments, and the behaviours and attitudes of the groups have remained largely unchanged, but there have been some shifts since stability returned.  Many predicted that with less financial pressure people would move back to the more highly reputed branded products.  This is true to a certain degree, but only for groups who are Brand Believers or Success Symbolisers and only on a small scale.  These groups were observed to grow in size and reduce their number of private label purchases between 2009 and 2010.  However, groups that are pro private label have remained the same or increased in terms of size, as can be seen in the Committed Cost Cutters group.  These groups show no sign of waning and have boosted the share of private label in their baskets indicating their appreciation for the offer is growing.

Top 5 private label brands:

  1. Woolworths Select  –  53%
  2. Homebrand  –  39%
  3. You’ll Love Coles –  34%
  4. Coles Smart Buy  –  34%
  5. Aldi Brands  –  21%

The attitudinal profiling and figures over the past year to me display that private label will continue to grow, even without cost cutting as an urgent driver.  Woolworths enjoys the greatest share for a single private label brand, with 53% of Australians currently purchasing the Woolworths Select brand.  Similarly Coles performs well with two of their private label products currently bought by 34% of the population.  And Aldi brands continue to show growth, combining to be the fifth most purchased private label offer.  These brands will continue to grow as challenges for branded goods, making the importance of innovation and differentiation to the branded manufacturers ever more critical.



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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.