Private label trends in Europe - Faculty of Law · Private label trends in Europe Matthias Queck Discount Analyst, Planet Retail ... Frozen Food Personal Care Cosmetics Baby Food

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Private label trends in Europe

Matthias QueckDiscount Analyst, Planet Retail


Private Label Trends in Europe

2

Albert Heijn, Netherlands

Müller, Germany


Overview – Private Label Trends

3

� Where Private Labels Are Growing

� Why Private Labels Are Growing

� Future Challenges


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


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


5

Source: GfK/Europanel

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



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

6

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

Source: Planet Retail

Private Label Share of Retailers’ Sales (%)


68 6975

95 98 98

32 3125

5 2 2

RefrigeratedFood

Paper, Plastic,Wraps

Frozen Food Personal Care Cosmetics Baby Food


7

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)



8

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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Migros, Switzerland

Boots, UK

Colruyt, Belgium

Rewe Group, Germany



10

Discount Retailers

Aldi, UK

Plus, Germany



11

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



12

Discount Retailers

Lidl, Scandinavia

Lidl, UK


Why Private Labels Are Growing

13

�� Why Private Labels Are Growing

As always, it’s all about Power and Profit



RETAIL ENVIRONMENTConcentrated market with

fierce competition

14

RETAILER

RETAIL BRANDING

CONSUMERSWell informed and accustomed to PL

MANUFACTURERSOvercapacities and dependence

Shift in balance of power – factors driving PL growth


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


15

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


Future Private Label Challenges

16

�� Future Private Label Challenges

�� Accelerated growth in new categories

�� Blurring dividing lines

- Increasingly professional PL marketing

- More manufacturing know-how



17

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

Accelerated growth in new categories



18

Blurring dividing lines

Private Label, or Manufacturer‘s Brand?


© Planet Retail Ltd – www.planetretail.net


19

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



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�� Future Private Label Challenges

�� Accelerated growth in new categories


- Increasing professional PL marketing

- Better manufacturing know-how

�� Co-operations

- Between PL suppliers and retailers

- between brand suppliers and retailers

�� Suppliers becoming service providers




21

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

Co-operations



22

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!




23

Co-operation ...

... or confrontation!

ASDA Essentials, UK


Summary

24


�� Europe: highest penetration and growth rate

�� Growth seen in strong and weak PL categories

�� some discounters are extending the brand ranges


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

�� Retail branding

�� Higher margin contribution

Future PL Challenges


�� Co-operation or confrontation


Summary

25

www.planetretail.net

Our comprehensive reportPrivate Label Trends Worldwide, 2006

is available fromwww.planetretail.net

Documents

Private label trends in Europe - Faculty of Law · Private label trends in Europe Matthias Queck Discount Analyst, Planet Retail ... Frozen Food Personal Care Cosmetics Baby Food