Own-label growth could be hard to swallow for some

By: Dean Best - 11 July 2007 16:18

The latest figures on the presence of own-label products in the UK grocery market will provide food for thought for many in the industry.

A study out today (11 July) claims that own-label will continue to grow its share of the entire market. Market intelligence group Key Note predicts own-label sales will grow to 42% of the grocery sector by 2011.

UK retailers will no doubt use forecasts like that to support their moves to boost and expand their own-label offerings.

However, for some manufacturers, the outlook – based on these numbers – looks bleak. The rise of own-label products in the UK, a market where competition between the top retailers is fierce, has led to pressure on the margins of manufacturers of own-label products – just ask struggling UK baker Inter Link Foods.

What’s more, as the likes of Tesco and Sainsbury’s move their own-label ranges into the more premium ends of the market, there is a greater threat to brand-owners.

A similar survey in the US earlier this year forecast that the value of own-label food and drink sales is set to rise by 16% by 2011.

Food for thought, indeed, on both sides of the Atlantic.