Recently, Procter & Gamble indicated that it would continue to raise prices even though lack of consumer demand – due to increased prices – was responsible for half of its sales decreases. P&G’s CFO indicated that the packaged goods behemoth’s focus on continuing price hikes would be acceptable to consumers because, after all, people still need to launder their clothes and wash their hands.
A private label brand is not the same as a commodity product. A recent trends report from Deloitte highlights a trend focused on the tension between commoditization and premiumization. Deloitte states, “To remain competitive, many retailers have shifted toward offering private labels…. While discount products (commodities) still represent the majority of private-label sales, the share of premium private labels continues to rise….”
I am often asked, what are the pros and cons of having your own brand, versus supplying the product for someone else’s brand. As in anything, there are two sides of the coin, but deciding which way to go should never be a coin toss. More often than not, it is not an either/or proposition … it is both.
Consumers are definitely giving retailers permission to grow their private label brands. The real question is will retailers grow private label brand value or simply grow more private labels?
David Jason’s voice wafts into British living rooms as images of everyday life fill the screen. ‘Some things in life just have to be,’ he intones. It’s not meant to be prize-winning creative work. It’s the latest part of Heinz’s increasingly successful strategy to fight private labels. The food giant offers a playbook on how to survive and prosper in an age of own-label brands.
