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May 22, 2019

The changing face of private label: Tesco brings Jack’s brand in-store

When asked why Tesco decided to launch a separate brand, boss Dave Lewis told Marketing Week: “It’s a very competitive market but in all of my 30 years in marketing I’d rather cannibalise myself than have somebody else cannibalise me.”

By GlobalData Consumer

As Tesco plans to launch 150 Jack’s branded product lines from their recently opened Jack’s discount stores into their supermarkets, it is clear that the role of private label and supermarket own-brands are continuing to evolve in the grocery industry.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

Private label grocery

According to GlobalData’s Q2, 2019 consumer survey, 33% of consumers reported that high-quality, own-brands/private label products are the most influential factors in deciding where they do their grocery shopping.

With many Jack’s discounted lines due to appear alongside Tesco’s other private labels, Tesco is introducing its new supermarket ‘branded’ tier which would appear to compete more directly with discount brands and own-label alternatives found at German rivals Aldi and Lidl.

In a retail environment that has recently seen ranges decreasing in size to reduce in-store choice to make purchasing decisions easier for consumers, this is particularly interesting. It would seem to suggest that Tesco is testing the waters to see if it can stave off outside competition by, once again, widening its own ranges to win over shoppers.

Tesco’s introduction of another own-brand option shows how consumers’ perceptions have changed towards these types of products, from being ‘me-too’ to ‘go-to’.

Speaking to Marketing Week, Tesco’s chief customer officer, Vanessa Bellini, said: “We have those ranges of products for people who want to feel savvy, that they have taken home a deal. Not that they are cheap or that they can’t afford something.”

This could be a particular opportunity affecting categories with less consumer engagement, such as household products, and where product claims can be easily matched and there is less emotional attachment by consumers to the brands. Products in these categories – such as bleach, washing up liquid and toilet rolls – tend to be price-driven thereby creating a real chance for new ‘value’ brands to succeed with savvy consumers.

When asked why Tesco decided to launch a separate brand, boss Dave Lewis told Marketing Week: “It’s a very competitive market but in all of my 30 years in marketing I’d rather cannibalise myself than have somebody else cannibalise me.”

It seems that this approach is now also filtering down to what’s on the shelf.

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.