At an event today hosted by MEP Ivan Štefanec, EuroCommerce and the European Retail Round Table (ERRT) released a new report on the benefits of private brands. Today, retailer owned brands make up some 30% of the grocery retail market in Europe. But the degree to which consumers choose them varies across countries and product categories. The report “Retailer Brands – Serving Consumers, SMEs and Innovation” is based on a review of current knowledge and focuses on four main areas: 1) the benefits to consumers; 2) how private labels foster competition and choice; 3) how retailers innovate with their brands, and 4) small and medium-sized enterprises thrive with the production of retailer brands.
The report also underlines the need for the findings of the Commission study on modern retail developments and their impact on consumer choice and innovation, to be seen in the wider context of consumer benefit. The findings also need to reflect how retailer brands allow small manufacturers to grow their business using the retailer’s ecosystem to sell their products.
“Our report shows that consumers value retailer brands, trust them and buy them again and again. While price remains a top priority for consumers, they also look for quality and the ability to compare products and switch to what suits their wishes and needs. With a range of product options from premium to budget ranges, and organic, “free-from” and “fair trade”, retailer bands make a real contribution to customer satisfaction”, Christian Verschueren, Director-General, EuroCommerce, commented.
Susanne Czech, Director-General, ERRT, stressed the choice and competition retailer brands offer: “In a highly competitive environment, retailer brands are a means for retailers to differentiate and provide consumers with real choice. If retailers were all selling branded goods only, they would only compete on price. This would fuel a “price race” to the bottom, with none of the benefits of choice which retailer brands offer. Retailer brands make a real difference to consumers every day, and that is why they choose them”.
Commenting on innovation, Koen de Jong IPLC said: “Innovation in retailer brands is flourishing. The process of introducing innovation is the result of co-development between the retailer and the supplier. It is more responsive to consumer demand and dramatically increases shopper choice”.
Speaking on behalf of the Private Label Manufacturers Association, Judith Kolenburg added: “Today, the retailer brands industry is exciting. The need for new products, contacts and ideas has never been greater. PLMA’s next trade show at the RAI Exhibition Centre in Amsterdam will present over 4,300 exhibit stands, including nearly 60 national and regional pavilions”.
Based on its key findings, the report recommends policy-makers to continue to encourage competition in the market, to resist pressure to treat retailer brands as an unfair practice, and to recognize retailer brands as a powerful driver of consumer choice and innovation.
The report is available here.