Private Labels: Copying or Creating?

To people not really familiar with what private labels are, these are products available inside a store carrying the name of the store or a sub-brand owned by the store. This concept was first introduced in France in 1976 by Carrefour, one of the largest retailer in the world. Usually these products are less expensive than the same items bought under a known brand.

In France, according to a survey carried out by the Secodip Institute in 2005, private label sales represent today in this country 27,2% of the sales in the retail industry (supermarkets and hypermarkets) against 18,1% in 1996. The multinationals reacted to this progression by lowering their own prices.

But today more and more we are seeing that retailers who are focusing on their private labels, are imitating the big boys, when it comes to packaging design and product presentation, leaving a very small differentation, so the consumer can make his choice, specially when the consumer is loyal to a multinational brand, he will buy impulsively, sometimes without paying much attention to the item and he will get disappointed once he reaches home and start emptying his bags.

Such behavior, might cause trouble to the private label brands, letting the consumer in an eternal question of loyalty to his brand and thinking that the retailer is trying to mislead him.

Definetely we will see more and more development in private label brands in the coming years and mainly in the food sector, but for sure the multinational are putting this evolution on their priority list in creating brand extensions and products extensions, so they make sure the market share is not going elsewhere.I would love to see retailers being more creative on their private labels presentations, as if we go into a more close comparison we will see lots of products looking like ” Dolly the sheep “.

Casino, Carrefour & Cora are French retailers, retailing in France is better known by: “La Grande Distribution” or “Les Grandes Surfaces”.