UK Grocery Retailers Revamp Store Brands

July 19, 2011

William Morrison Supermarkets Plc will make over its store brands to compete with rival U.K. food retailers and boost profitability amid slowing sales growth. This marks the first revamp of its store brands in four years.

The 8,000 items will be given a new look that differs from the three-tier system of good, better and best-priced items typically used by British grocers for their store brands, Commercial Director Richard Hodgson told Bloomberg News. They will start appearing in Morrison stores at the end of September. Private label makes up 45 percent of Morrison’s sales.

Other U.K. supermarket players are refreshing their private label offerings as well. Sainsbury is about a third of the way to relaunching its 6,500-product mid-tier By Sainsbury’s line, according to the report.

Investing in the Sainsbury’s house brand helps it differentiate from rivals, said Mike Coupe, group commercial director for the London-based company. Previous investment in its lowest-priced value line helped Sainsbury leapfrog Asda to become the second-largest value range, behind Tesco.

Waitrose is also investing in its store brands. The unit of employee-owned John Lewis Partnership Plc is adding 3,500 new SKUs this year, a 70 percent increase over last year. The high-end chain offers top-tier lines such as the Duchy range, founded by Prince Charles, and the mid-tier Essential product line, but about 54 percent of Waitrose’s revenue comes from its store brands, with the Essentials brand accounting for 18 percent of sales, the report stated

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More proof of the extending influence of own label in the UK, which is not surprising given dwindling budgets and increasing food costs. What will be interesting to see if Morrison's plays by the established Own Label design norms of uniformity and playing it safe or whether it will try to act more like a brand. If it's the later it's further proof of retailers ambition to chase down lucrative brand loyal consumers. But this competition can only be a good thing for the consumer. They get better looking Own Label products which snap at the heels of established brands causing them to take the next creative leap forward. Dave TimothySenior Account Director Anthem Worldwidewww.anthemww.com

Dave Timothy at 12:14pm EDT - July 20, 2011

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