Many of Australia’s supermarkets are moving towards private-label groceries, but while consumers are interested, the price drop may be hurting retailers in the long run, according to new research by Nielsen’s Homescan panel.
Private-label products grew slightly in the last six months, going from 24.5% to 24.7% of total groceries over two quarters. However, this quarter saw the average spend on private label drop by A$5.79 – down from A$208.03 in the December quarter to A$202.24 in March.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
While private-label sales volumes have not dropped, the pricing war between the two major supermarkets – Coles and Woolworths Ltd – has directly impacted bottom lines.
“Shoppers’ store repertoire is not changing significantly, but how they allocate household spend between competing stores and brands is,” said Michael Walton, Nielsen’s executive director for consumer and business intelligence.
However, there is little evidence that price discounting on branded and private-label goods is driving significant increases in foot traffic across the major retailers.
“This is likely due to the fact that one retailer immediately trumps the other as soon as a price reduction is announced. With so many initiatives in play at once it is difficult to isolate a ‘silver bullet’ that is responsible for the growth in share of the major retailers’ this quarter,” said Walton.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“The impact of the price campaigns is being felt by the independent retailers and non-supermarket channels. They have lost share of trade in the most recent quarter and these gains are going to the major retailers.”
Australian Food News is Australia’s leading resource for the food industry, delivering daily news from the grocery, retail and hospitality sectors to 40,000 professionals each month.
http://www.ausfoodnews.com.au/
