Private label trends in Europe - Faculty of Law · Private label trends in Europe Matthias Queck...

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Private label trends in Europe

Matthias QueckDiscount Analyst, Planet Retail

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Private Label Trends in Europe

2

Albert Heijn, Netherlands

Müller, Germany

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Overview – Private Label Trends

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� Where Private Labels Are Growing

� Why Private Labels Are Growing

� Future Challenges

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Where Private Labels Are Growing

4

Europe23%

North America16%

Latin America2%

Asia Pacific4%

EmergingMarkets6%

Global17%Source: ACNielsen, Sept. 2005

(+0.4%)

(+0.7%)

Europe has the highest PL penetration and the highest growth rate worldwide

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41.0 39.9

35.1

29.4 29.3 28.9

23.219.9

10.9

0

5

10

15

20

25

30

35

40

45

Switzerland UK

Germany

Spain

Netherlands

France

Belgium

Austria

Italy

Where Private Labels Are Growing

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Source: GfK/Europanel

PL Share of Sales in Major European Markets (%), 2005

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Where Private Labels Are Growing

95 95

63 63

4245

25

40

25

35

3032

2325

21

2422

23

12 13

10 10

0

10

20

30

40

50

60

70

80

90

100

Aldi Schwarz Tesco Casino ITM Carrefour Rewe Auchan Ahold Metro

Group

Edeka

2003 2004

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Private label share of Europe‘s leading grocers (%), 2004 vs. 2003, estimated

Source: Planet Retail

Private Label Share of Retailers’ Sales (%)

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68 6975

95 98 98

32 3125

5 2 2

RefrigeratedFood

Paper, Plastic,Wraps

Frozen Food Personal Care Cosmetics Baby Food

Where Private Labels Are Growing

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Shares by product area (%)Globally 2004, based on value sales

Source: ACNielsen, Planet Retail

Manufacturer Brands

Retailer Brands

(-3) (-1)(-1)

(-0.4) (-0.2)(-0.1)

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Private Label Trends in Europe

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Full-Range Retailers Discount Retailers

Pushing PL shares bylaunching new lines:

premiumspecial interest

Pushing PL shares by

● Extending lines● Launching new lines:

special interestpremium

● Revamping lines

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Private Label Trends in Europe

Migros, Switzerland

Boots, UK

Colruyt, Belgium

Rewe Group, Germany

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Private Label Trends in Europe

10

Discount Retailers

Aldi, UK

Plus, Germany

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Private Label Trends in Europe

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Full-Range Retailers Discount Retailers

Pushing PL shares by

- Extending lines- Revamping lines- Launching new lines(special interest, premium)- reducing floor space forbranded products

Pushing PL shares bylaunching premium and special interest lines

Pushing brand shares bylisting more branded topproducts

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Private Label Trends in Europe

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Discount Retailers

Lidl, Scandinavia

Lidl, UK

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Why Private Labels Are Growing

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���� Why Private Labels Are Growing

As always, it’s all about Power and Profit

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Why Private Labels Are Growing

RETAIL ENVIRONMENTConcentrated market with

fierce competition

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RETAILER

RETAIL BRANDING

CONSUMERSWell informed and accustomed to PL

MANUFACTURERSOvercapacities and dependence

Shift in balance of power – factors driving PL growth

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52%54% 56% 57%

60%64% 66%

73% 74% 74%

Gre

ece

Germ

any

Spa

inHung

ary

Franc

e

UK

Nor

way

Switze

rland

Italy

Neth

erlan

ds

BRAND

Why Private Labels Are Growing

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Price Differential Private Labels Versus BrandsAverage price of PL product compared with leading brand Brand = 100%

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Future Private Label Challenges

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���� Future Private Label Challenges

���� Accelerated growth in new categories

���� Blurring dividing lines

- Increasingly professional PL marketing

- More manufacturing know-how

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Future Private Label Challenges

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New economyprivate label rangefor cosmetics, offered in Norma discount storesin Austria

Accelerated growth in new categories

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Future Private Label Challenges

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Blurring dividing lines

Private Label, or Manufacturer‘s Brand?

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Future Private Label Challenges

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Benchmark Private Label: Tesco Finest (left) and Coop Fine Food (right)

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Future Private Label Challenges

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���� Future Private Label Challenges

���� Accelerated growth in new categories

���� Blurring dividing lines

- Increasing professional PL marketing

- Better manufacturing know-how

���� Co-operations

- Between PL suppliers and retailers

- between brand suppliers and retailers

���� Suppliers becoming service providers

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Future Private Label Challenges

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French brand manufacturer Fromagerie Bel sells its Babybel cheese with the Aldi label "Be light" on it.

Co-operations

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Future Private Label Challenges

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Asda marketing and brand director Richard Hodgson described it as his job to 'undo' the marketing of brands sold in Asda stores and to drive consumers to the retailer’s

private label offering instead.

Planet Retail News, 11 May 2006

Co-operation ...

... or confrontation!

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Future Private Label Challenges

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Co-operation ...

... or confrontation!

ASDA Essentials, UK

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Summary

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Where Private Labels Are Growing

���� Europe: highest penetration and growth rate

���� Growth seen in strong and weak PL categories

���� some discounters are extending the brand ranges

Why Private Labels Are Growing

���� Shift in balance of power: Control over supply chain

���� Retail branding

���� Higher margin contribution

Future PL Challenges

���� Blurring dividing lines

���� Co-operation or confrontation

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Summary

25

www.planetretail.net

Our comprehensive reportPrivate Label Trends Worldwide, 2006

is available fromwww.planetretail.net

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