Inflation charts growth path for private labels
Subhiksha, Spencer’s, Sabka Bazaar and Food Bazaar have created their own brands across categories like atta, sugar, biscuits, packaged water, tea, rice and condiments, which they sell through their own stores.
NEW DELHI: Private labels, which are about 15-20% cheaper than national brands, are flying off the retail shelves, thanks to rising prices of daily consumption items.
Organised retailers, or modern trade as they are called, are seeing a 20% jump in the sales of their own brands across product categories.
Subhiksha, Spencer���s, Sabka Bazaar and Food Bazaar have created their own brands across product categories like atta, sugar, biscuits, packaged water, tea, rice and condiments, which they sell through their own stores.
Typically, they are all outsourced with retailers controlling their quality and branding. Since they are sourced directly and don���t have large overhead costs like an established player, they save a lot of intermediary costs, most of which are then passed on to the customers.
Organised retailers, or modern trade as they are called, are seeing a 20% jump in the sales of their own brands across product categories.
Subhiksha, Spencer���s, Sabka Bazaar and Food Bazaar have created their own brands across product categories like atta, sugar, biscuits, packaged water, tea, rice and condiments, which they sell through their own stores.
Typically, they are all outsourced with retailers controlling their quality and branding. Since they are sourced directly and don���t have large overhead costs like an established player, they save a lot of intermediary costs, most of which are then passed on to the customers.
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So, a 250-gm pack of Spring Fresh tea (Subhiksha���s own brand) costs Rs 44 compared to Tata tea which is priced at Rs 46.50. Similarly, Sabka Bazaar basmati costs Rs 175/5 kg while branded basmati is Rs 309 in Home Store.
Spencer���s Smart Choice mixed fruit jam is 10-15% cheaper than HUL���s Kissan. This is true for other food and non-food products as well. ���Around 74% of the households cannot afford branded products in their daily household basket, especially post-inflation. We cater to this section of the society by offering private labels at discounted prices, making it affordable and adding value to every Indian household,��� said Subhiksha president (marketing) Mohit Kattar.
The retailer sells Dadimaa���s Pickels, Dr Beam toothpaste and toothbrush, Fabio Pasta, It���s Fruit squash, juices, ketchup and jams, Just Pure Atta, Tatva Cocount Oil, which compete with mainstream brands like Colgate, Close Up, Pepsodent, Sunfeast pasta, Kissan, Lal Mahal, Annapurna, Pilsbury, Tata Tea Parachute oil, Lux, Cinthol, among others.
���The market share of private labels has gone up from 25% to 35% in the last three months due to inflationary pressures,��� agreed Spencer���s Retail vice-president (marketing) Samar Singh Sheikhawat. Spencer���s itself has seen a 5-10% increase in the sales of its own labels. ���It���s especially true for the new brands that we have introduced in our stores,��� said Mr Sheikhawat.
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According to Food Bazaar CEO Sadashiv Nayak, retailers have the flexibility to increase supply of their own labels whenever they want. Private labels as a segment is growing 50-60% in all retail outlets as they provide value for money, he said. Home Stores India CEO Salil Sahu agreed that private label in his stores witnessed a 10% rise in sales. ���Consumers have become more price conscious after inflation hit the market and if they get quality with a better price they take to private labels,��� said Mr Sahu Download
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