Think tank: Brands vs own-label

With shoppers on the lookout for value, conditions are right for a boom in own label. However, analysis of sales trends within independent stores shows that in some categories premium trends are emerging.

The biscuits category is growing at a rate of just 0.7%, underperforming against total independent sector growth of 5.8%. Although this category is traditionally dominated by branded goods, accounting for 83.6% of total sales over the past year, own label has seen its share rise 0.7%.

SalesOut data manager Linda Horton says: “While McVitie’s Digestives remain popular, sales are down 4.6% on last year, while own label digestives (400g) have soared by 15.7%.”

But in other sub-categories, it seems big brands are driving growth. McVitie’s Jaffa Cakes (150g) have climbed from fifth to third, while Burtons Maryland Chocolate Chip Cookies (150g) and Nestlé Kit Kat 2 Finger have also been performing well.

Horton points out that in hot beverages, own label coffee granules 100g have enjoyed a huge rise in popularity. The hot beverage market is growing at a rate of 3.3% and branded coffee has seen its market share decline 0.7%. Says Horton: “Nescafé Original Coffee Granules has seen a decline in sales for all of its sizes, although the 100g jar remains the top-selling product over the past year.

“However, growth from Nescafé Gold Blend (100g and 200g) and Douwe Egberts Pure Gold Coffee Granules 100g suggests a move towards premium instant coffees.”

An interesting story emerges in the spirits category, which is growing at a rate of 9.1%. In the past year, there has been a 2% swing towards branded spirits, as consumers opt for recognised names. But own label vodka, growing at 3.6%, has held pole position over the past year despite competition from Glens Vodka (+10.1%) and Smirnoff Red Vodka (+16.2%).

Horton adds: “The importance of own label in the spirits category stretches further than just vodka, with six products in the top 25. While own label whisky has been hit hard by promotional activity from branded competition, it ranks sixth in the chart of top-selling spirits, ahead of Jack Daniels and High Commissioner. Overall, own label accounts for 24.9% of the category.”