2023-10-24 07:41:00
Great week of shopping at the best prices: DH helps you spend less on your supermarket shopping
The latest edition of the International Private Label Yearbook, published by the PLMA (Private Label Manufacturers Association) reveals that, over the last 12 months, the market share (in value) of private label products in Europe has increased by 1.7% to reach 38.1%. In Belgium, it even reaches 38.9%, certainly still far from Switzerland, the only country where it exceeds 50%, reaching 51.8%. But if we expect sales volumes, the Belgians are, behind the Swiss, those who consume the most private label products. In our shopping carts, 55.4% of the products are own brand.
Products which, in times of purchasing power crisis, are more popular than ever. For distributors, this has become a major issue today and innovation is constant. The big advantage for distributors is cost control across the entire chain. An ongoing negotiation with the manufacturer to try to cut costs without sacrificing quality. Limited marketing as well, where the big brands are in constant communication. Logistics, transport, packaging, each item is analyzed to limit expenses. Not to mention that national brands also have to pay to be on the shelves, which therefore also impacts its selling price.
Here is PingPrice, the ideal application to make maximum savings when shopping at the supermarket!
“It is logical that overall, product baskets consisting mainly of first-price brands or white goods are the cheapest in the ranking. But by opting for these products at Aldi and Lidl instead of (inter)national brands , you can save up to 62%, (compared to the average price of international brands in other supermarkets),” says Test-Purchases.
For his part, Christophe Echement, CEO of PingPrice, somewhat moderates the savings made by opting only for private label products. “It is true that the price gap between private labels and MNs is significant. A basket composed exclusively of private label products allows savings of up to 70%, but this in comparison with a basket composed only of brands (inter) However, the average consumer basket is made up of +-52% of private label products representing 39% of the cost of the basket while MN represent 48% of products for a total of 61% of the receipt. in other words, if we take a customer who makes up his basket of 50 products, he will in theory have opted for 26 private label products for a total of €70 if we take into account the average price of €2.70 per MDD product. MN’s 24 other products, with an average price of €4.6, will cost him €110. In total, his Shopping Cart costs him €180. If he had only opted for MDD products ( 50 x 2.70 €), the bill would amount to 135 €. And if he only consumes MN products, the expenses amount to 230 €. Which demonstrates that the real saving possible compared to for an average basket €45 (€180-€135) is 25%, on the other hand the difference between an MDD basket and a MN basket is 70%. It all depends of course on your initial proportion of private labels in your shopping basket.”
According to price comparisons carried out by PingPrice, we note that the cheapest in private label is Everyday, from the Colruyt group, closely followed by Simpl (Carrefour) and 365 (Delhaize) which are equal. We are talking about differences of 4 to 5%. On the other hand, if we exclude these white products to focus on the distributor brands Boni (Colruyt), Carrefour and Delhaize, Colruyt does not (always) win as easily (see our comparison in infographic).
Comparison of distributor brands / national brands ©IPM Graphics
Private labels, in the end, are good for the consumer, who can fill their shopping cart at a lower cost… but it is also a good deal for the distributors. Indeed, faced with the sharp rise in prices, particularly for major brands, distributors were able to recover part of the lost margin (because of wage indexation, the rise in energy prices, transport, …) by increasing the price of certain own-brand products much more than simply reflecting this increase in costs. “We see that private labels are catching up compared to brands, and although remaining less expensive, they have regained part of the gap which caused consumers to turn to them during periods of acute crises”, we already indicated Christophe Echement a few weeks ago. We noted that in the space of a little over a year, “at Carrefour, curry chicken salad, for example, saw its price increase by 42% between January 2022 and May 2023 for the brand Simpl, +31.28% for Carrefour Extra, while it is lower for the Délio brand (+13.13%).”
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Faced with this competition, national brands are waging a real promotional battle to try to attract consumers. “It is especially the market leaders who suffer from the growth of private labels, just like the private labels of hard discounters,” explains Davy Van Raemdonck, director of the consumer panel, to our colleagues at Retail Detail. “One might assume that lower social classes buy more promotions when buying A brands. It turns out that this is not the case: higher-income families buy proportionally more A brands, which are proportionally also more often on promotion. In effect, you are subsidizing wealthy families with promotions.”
The promotions of major brands are therefore not a way of countering the gain in market share of distributor brands, but rather a cockfight to try to convince the most affluent consumers. And, in this area, the fight has been tough in recent weeks. If Albert Heijn was the first to launch the free 1+2 or 2+3 model, the other distributors have now followed suit. Starting with Intermarché which does not hesitate to do 1+10 free even if the mechanics are somewhat different since the products offered are not identical to the product purchased and therefore have a significantly lower value. Even Delhaize, which focused above all on quality in the past, is making low prices its main axis of communication, just like Carrefour this October focusing everything on promotions through its month of “scandalous promotions”. Without forgetting Colruyt which, on the occasion of 50 years of “best prices”, is offering many products at -50%. Really interesting promotions? Find out tomorrow, in the continuation of our “week of shopping at the best price.”
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