Sainsbury’s has today attributed its continued strong growth in part to its own label offer. Retail Week takes a look at the state of play across the big four grocers’ own brand offer.
Tesco has worked hard to revive its own brand offer since issuing a shock profit warning in January 2012. Its strategy began by ditching the iconic blue and white stripes of its Tesco Value brand after 20 years in favour of new line, Everyday Value, which featured improved packaging and product specifications. Tesco is now on track to re-formulate and re-package 8,000 products across its ranges this year.
The retailer will next week officially relaunch its top-tier Finest range which is worth £1.4bn annually and 12 million products from which are consumed each week. The 1,500 product range, first launched 15 years ago, is now sponsor of ITV drama Downton Abbey and could spur Tesco shoppers to trade up.
It has also thrown its weight behind product innovation. Retail Week revealed on Monday that the grocer is targeting 10% of its sales in 2015 coming from products it does not already sell. In the first half, Tesco has begun the strategy in earnest as more than 1,750 brand new products were introduced.
However, the grocer was at the centre of the media’s coverage of the horse meat scandal, so Tesco will have to work twice as hard to ensure its own brand appeal is revived.
Asda has put the majority of its own label focus on its Chosen By You range, which tests products via consumer panel before they hit the shelves. In August, Asda expanded its offer to a 180-strong product line called Chosen By Kids, which includes breakfast, lunch and evening meals. Furthermore, its partnership with West London cookery school Leiths has added clout to its Extra Special premium offer.
Asda has also used its links with parent Walmart to export its offer globally. It has enjoyed some success in surprising areas – for example, its Extra Special Golden Ale has become the second best selling in the Japanese supermarket chain Seiyu.
Its George clothing brand remains the UK’s largest supermarket clothing brand and a refit of its in store offer has formed the basis of a snappy strategy to “dial up our fashion credentials”, according to non-food boss Andrew Moore.
Chief executive Justin King has extolled the virtues of its own label offer throughout the economic downturn as shoppers combine its premium and basic lines in the same basket.
King said today: “Our own-brand offer continues to grow at over twice the rate of branded goods, with Taste the Difference growing particularly strongly and By Sainsbury’s performing well following its re-launch.”
That Tesco’s Price Promise promotion, which matched its prices on branded and own label goods, provoked the ire of Sainsbury’s is perhaps unsurprising as the latter believes its combination of value and values – i.e. ethically sourced low prices goods - is a winner. While Tesco focuses purely on price, Sainsbury’s says the straight price comparison is not a fair one as it does not reflects the value its ethical principles brings.
In non-food, Sainsbury’s moved to bolster its offer last month by relaunching its Tu brand into nearly 400 stores. The brand has been refocused on clothing, away from its general merchandise products, as it aims to outmuscle rivals and build on its position in the market. Tu is the 11th biggest clothing brand in the UK by value and 7th by volume.
Morrisons is in the process of a wide-ranging own brand overhaul. By last year it had refreshed 2,500 lines since kicking off an own label project in October 2011 and plans to have refreshed 10,000 by next January.
Chief executive Dalton Philips has pinpointed its M Savers branded, launched last year, as a strong point of difference and claims it is the fastest growing value own label in the market.
At the premium end, its 400-line M Kitchen range, developed by executive chef Neil Nugent at the grocer’s kitchen at its head office in Bradford, has been relaunched. Last week, Morrisons kicked off a marketing campaign for the lines and took celebrity chefs on the road to display the products’ quality.
The reach of its Nutmeg clothing range has also been expanded. It launched in 100 stores in March and is now in 172 stores in dedicated shop-in-shops.