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Super Premium, Niche Lines Opportunities For PL

May 24, 2012

If North American retailers want to take the next step in their private label programs, they should look into super premium lines and targeted labels such as age-specific or ethnic private labels, Planet Retail Global Research Director Natalie Berg told a webinar audience this week.

 

Saying that private label was in a “very strong position” in a challenging and competitive retail environment, Berg said new areas would be the best chance to gain share in private label.

 

“As the economy picks up, I think it will gain traction, and we will see more investment in the premium end, and also in niche private labels as well,” she said. “So moving into potentially age-specific private label or ethnic private label is certainly an opportunity in the U.S., and I don’t think many retailers are pushing that in a meaningful way at the moment.”

 

Berg said North American retailers could pick up tips from their European counterparts when it comes to private label. While private label penetration in the U.S. reportedly varies from 15 percent to 20 percent, it reaches as high as 50 percent in the United Kingdom, Germany and Spain.

 

“When we look at the U.S., it traditionally has lagged behind the rest of the world when it comes to private label, and it’s really lagging behind a number of markets in Europe,” she said. “I think private label is one area where it’s great to come to Europe and get inspiration.”

 

Among the biggest sources of that inspiration, she said, is having retailers act more like national brands when looking at their private label strategies.

 

“Around 94 percent of Supervalu shoppers buy private label, and 20 percent of those shoppers buy on a consistent basis,” she said. “For a retailer like Supervalu, it was really important to make that investment in a single (private label) line in order to achieve those synergies … Retailers are really moving away from being a basic private label range, and acting much more like brands.

 

“We’re also seeing retailers venture into new categories that previously were deemed too risky or better left to the brand manufacturers, so moving into categories like babies, pet and beer.”

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