Major retailers profit from crisis to gain ground with private labels

Food store networks generate around 800m euros from sales of
private labels, which they throw into battle with major brands at a
10-20% lower price. The private labels of consumer goods store
networks attract 4.5% of a household’s current expenses, shows a
GfK survey drawn up in the first quarter. Moreover, only two of ten
consumers who tried these products say they did not buy them a
second time. Clients’ rising price awareness and producers’
dramatically falling investments in launches of new brands have
favoured the development of store networks’ private labels. Thus,
in recent years, retail chains’ labels have posted a sales increase
put at 80-100m euros, whilst in the first quarter of 2009 they held
a share of 4.1% in terms of value of a market worth around 20bn
euros. On the consumer goods market, sales of retailers’ private
labels can be thus valued at around 800m euros, accounting for
almost 10% of modern food retail. In the past year, the penetration
rate of retailers’ own labels has almost doubled: while in April
2009 just 46% of consumers tried these products, the penetration
rate in the first quarter reached 88%, according to the GfK
survey.