Mar­ket share growth of pri­vate la­bel prod­ucts hits a ceil­ing

Kathimerini English - - Front Page - BY DIM­I­TRA MANIFAVA

At the end of the day, it ap­pears that Greek con­sumers have re­mained faith­ful to their fa­vorite “name” brands to an ex­tent only seen on the US and Italy. Although pri­vate la­bel prod­ucts sold by su­per­mar­kets have recorded sig­nif­i­cant growth rates in the last three years, reach­ing an 22 per­cent mar­ket share, it ap­pears that they have hit a ceil­ing and are now in de­cline in sev­eral cat­e­gories.

Be­sides the char­ac­ter­is­tics of Greek con­sumer be­hav­ior, one of the main fac­tors im­ped­ing pri­vate la­bel prod­ucts’ growth has been the nar­row­ing of the price dif­fer­ence with popular brands, thanks to the lat­ter’s ex­ten­sive of­fers. Fig­ures show that as soon as a well­known brand re­duces the price of a prod­uct, its mar­ket share grows, even if the dif­fer­ence in price com­pared to the pri­vate la­bel equiv­a­lent is more than 50 per­cent.

Data from mar­ket re­search ex­perts IRI show that the mar­ket share of pri­vate la­bel olive oil stood at 26.6 per­cent in Au­gust 2013, with name brands ac­count­ing for 73.4 per­cent. One year later popular brands had reached 75.5 per­cent by re­duc­ing their prices by an av­er­age of 1.34 per­cent, while the su­per­mar­ket brands only at­tained 24.5 per­cent.

Do­mes­tic clean­ing prod­ucts by fa­mous brands had a mar­ket share of 80.7 per­cent in Au­gust 2013, but this year they have added by 6 per­cent­age points by cut­ting their prices by 2 per­cent. UHT milk by name brands saw its mar­ket share rise 1.2 per­cent in a year this Au­gust, be­fore milk prices started de­creas­ing after the sum­mer. The fresh juice and bub­ble bath cat­e­gories show a sim­i­lar pic­ture.

Pri­vate la­bel prod­ucts are cheaper as they have lower pack­ag­ing costs and are not ad­ver­tised. How­ever, in the case of food prod­ucts, the com­pa­nies that pro­duce them usu­ally have their own brand, and choose to use dif­fer­ent recipes for the com­modi­ties that bear su­per­mar­ket lo­gos.

A se­nior of­fi­cial at a well-known dairy company in north­ern Greece which pro­duces yo­gurt for almost all ma­jor re­tail chains told Kathimerini that the pri­vate la­bel prod­ucts it makes do not lag its own brand in qual­ity but do have a dif­fer­ent taste.

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