Sainsbury’s has revealed that sales from its Basics own-label value offer are 50% higher than a year ago.
The retailer has launched its first TV campaign in which celebrity chef Jamie Oliver promotes the range, which has been increased by 15% since January. Print and outdoor ads are also running.
Sainsbury’s value label success chimes with a report from researcher Verdict, which found that the switch to own-label as consumers have traded down during the recession is likely to be permanent.
Chopped tomatoes are the fastest-selling Basics line – the retailer sells 38 tins every minute. The 650-strong range extends from tomatoes to toasters, and this week a £19.99 DVD player and set-top box were launched.
Other items newly added include asparagus – “slightly bendy, great for soups”, according to the grocer, and plain naan bread – “a little smaller, still a big treat”.
Basics product manager Kate Bailey said: “We will continue to keep adding new lines into next year.”
Verdict found that trading down has become “endemic” but, in spite of the impact on margins, from a “retailer’s perspective it is better to have lower-value sales than to lose customers to the competition.”
However, Verdict forecast that growth rates at the bottom end of the own-label market are likely to slow when shoppers begin to shop for more premium own-label ranges as economic conditions improve.
Daniel Lucht, co-author of the report, said: “When we come out of this [recession], I think there will be a lot more frugality and private label will therefore remain important.”