Archive for Australia
Private Brand Invades Australia
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An interesting Private Brand blog post by Jonathan Sinton for the Australian site Marketing Mag. The post illustrates that the Private Brand story in Australia is intriguingly similar to the U.S.
A battle in the aisles!
Many have said that the tightening of belts brought on by the recession will pass once the good times return, but this would depend on the lessons consumers have learnt being unlearnt. It also ignores past experience, when we’ve seen emerging trends in the consumer landscape accelerate and establish themselves during a crisis more often than come and go. In the supermarket, shoppers have learnt that cheaper can be just as good, with private label products reaching a record share (over 20%) of the market in Australia. While there may be some relaxation of the purse strings when things improve, the trend towards private label is a new purchasing mentality that is here to stay.
Research we conducted in July found that, having been given permission to reassess what constitutes value, shoppers are more likely to select the less expensive option – be it branded or private label – unless convinced that a dearer product is tangibly or emotionally better. Even historically resistant categories are under threat. For instance, Huggies nappies were once bullet proof against private label due to the high level of involvement and trust linked to the category, but Aldi has shaken the market up with its cheaper offer gaining advocacy amongst the most viral of groups – mothers. Across all categories, we’re seeing consumers trading down from branded offers, with the popularity of private label products growing amongst adult households, young singles and young couples. And they’re doing so for a variety of reasons – some out of preference for private label and others despite an aversion to it.
The most common reasons pro-private label shoppers buy these products are to save money to spend on the family, the belief that brands are all hype and not of superior quality, and to display thrift by being smart selectors. But surprisingly, many (up to 40%) who buy private label do so despite being concerned over the perceived lower quality of the products and packaging, its inferior status image and lack of innovation. Regardless of their negative opinions, these shoppers are slipping private label products into their trolleys highlighting that purchasing behaviour does not always reflect loyalty. In this case, it is more an indication that branded manufacturers have few true ‘brand believers’. As a result, branded products face a challenge – offer something that private label cannot or face losing market share.
If you enjoyed this post, get FREE updates when you subscribe to Myprivatebrand’s Blog by Email.Australian vs European Private Brands.
Posted by: | CommentsThis is a compelling snapshot of Australian and European grocers and their Private Brands. Written by Daniel Palmer of the Australia Food News it presents an intriguing comparison of the two markets which could present parallels and learnings for American retailers.
How much can the Australian grocery sector learn from the European experience?
The European shopper has changed in much the same way as their Australian counterparts and the industry has been forced to respond, attendees of Highlands 2009 heard today.
Joanne Denney-Finch, CEO of IGD – a leading group of experts on the food and grocery industry, reported on the changes consumers have been making which have seen trends towards private label and discounters.
“Most shoppers are creatures of habit,” she said at AFGC’s Highland Conference. “And in the good times, in the developed world, they grew more cash rich and time poor. But in recession, many are trading time back for cash.”
“So in the UK we’re now eating more at home, instead of at restaurants…cooking more from ingredients…shopping around more…taking more time over our choices…cutting food waste…preparing more lunches at home…and even growing more of our own food.”
The contest to deliver value has never been so strong in the industry, Ms Denney-Finch said. And manufacturers are being forced to contend with the trends toward private label and discounters.
In the UK, private label share is markedly higher than Australia thanks largely to trailblazing retailers like Marks and Spencer and it is still growing, with budget own label soaring by 42% last year amid a deepening recession.
“They’ve encouraged a very sophisticated base of suppliers, doing things differently, pushing back the technical boundaries and developing entirely new categories like chilled ready meals and prepared sandwiches,” Ms Denney-Finch explained.
“It’s now multi-tiered … with not only “good, better and best” levels of quality but also healthy options, organic children’s ranges and foods for special diets.”
Own label commands an average market share in the UK of 47% as opposed to around 23% in the Australian grocery sector.
“It’s taken over thirty years for own label to reach this position in the UK,” she advised. “But now the precedent has been set, others can follow much faster … and own label has grown its share in each of the 18 European countries tracked by Nielsen over the last 5 years.”
Discounters, with their commitment to private label, posed “a second big threat to the leading brands”, according to IGD.
“In Germany, often called the home of discounting, Lidl and Aldi now hold a 35% share of the grocery market between them,” Ms Denney-Finch reported. “Whereas in Spain, almost half the population has been buying either more from discounters, more own label or both over the last year.”
“Some people call all of this activity “downtrading” but you have to be careful … shoppers don’t always see it that way. A fifth of British shoppers told us that they’ve been eating better recently … whereas only a tenth are eating worse.”
Economising should not be confused with downtrading, IGD contend, with a focus on saving cash without sacrificing quality often prevalent.
“Own label provides one route for this and as you can see from our latest research, a majority of European shoppers feel that quality standards have been improving,” Ms Denney-Finch noted. “So the growth of discounters in Europe is not just down to hard-up shoppers anxious to save money.”
“Of course Australia may not follow the same path,” she cautioned, “but it’s good to share the experience.”
There was no longer a “hiding place for anyone who doesn’t offer a genuinely good deal” but “value and not just price” is behind consumer decisions in the current climate.
Read the entire article.
Largest Australian Grocer Redesigns Private Brand
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HomeBrand is set to be redesigned this year
In a continuing worldwide trend, of Private Brand expansion, redesign and relaunch Australia’s largest grocer, Woolworths is set to undergo a major redesign. Hulsbosch Strategy & Design who earlier this year created a new logo for the Australian grocer will redesign and update HomeBrand, the value tier brand, as well as Select, the National Brand Equivalent or mid tier brand. Their other Private Brands, Naytura, Freefrom and Organics, are relatively new and are not expected to change.
In August of 2008 Woolworths unveiled its new look as part of an Australia-wide rebrand to be rolled out across its 780 stores. The new branding was created by leading Australian designer Hans Hulsbosch of the Hulsbosch Agency who recently
As part of the change, Woolworths will convert its Safeway stores in Victoria to the Woolworths name. According to a Woolworths press release:
Woolworths General Manager of Marketing, Luke Dunkerley, said that the rebranding reflects Woolworths’ commitment and track record of providing Australian shoppers with quality fresh food and groceries at competitive prices.
“We are rebranding stores to retain our leadership position in what is an extremely competitive market. We have only achieved this leadership position by ‘walking the talk’ and Australian shoppers are voting with their feet,” he said.
“The refurbishment of the supermarkets that is accompanying the rebranding will deliver customers wider aisles, brighter supermarkets and a more pleasant shopping experience.
“The rebrand will bring a fresh new look to supermarkets while continuing to offer customers the fresh food and exceptional value they have come to expect from Woolworths. It’s a new look with the same great value,” he said.
The redesign of Woolworths Private Brands would seem to be the next logical step in the evolution of this retailer.
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