Supermarket own-labels have become sophisticated brands in their own right, according to a report published in the UK.

According to the Key Note Own Brands report, over recent years own-label brands have a segmented profile and use variations to meet the demands of every consumer.

Key Note said own-label brands "embraced the changing needs of their consumers with new products aimed at individual customer segments, as well as successfully diversifying into new product areas".

Growth rates within the own-label market reflect the growing popularity of retailer brands and the broader range of products on offer, according to Key Note.

In 2006, the total value of own-brand sales was GBP72.1bn (US$147.6bn), representing a rise of 18% over the review period from 2002 to 2006. Moreover, this is almost twice the growth rate of 9.5% for total retail sales.

Key Note said the power in the retail supply structure has shifted from the brand owner to the retailer.

"The speed at which supermarkets can react to the changing trends within the food and grocery industry gives them a distinct advantage over many of the larger brands - they have the ability to bring new own brands to the market at a fraction of the time and cost it would take to do with a well-known brand," Key Note said.

"Retailers now control category price-setting and are more skilful at promoting their own goods in store. The resulting higher profit margins and huge quantities purchased leave them well placed to negotiate strongly with suppliers.
Key Note expects retailers to continue to expand into the non-food sector of own-brand retailing over the next five years, in search of further growth.