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Own Brands Market Report 2010
Key Note Publications Ltd, Nov 2010
This Market Report discusses the UK market for own-brand products. In particular, it focuses on own brands in the following sectors: groceries; clothing and footwear; do-it-yourself (DIY) products; cosmetics and toiletries; and over-the-counter (OTC) medicines.
The authors estimate that, in 2009, the total value of own-brand sales was £96.3bn. This represents an increase of 34.6% over the review period (2005 to 2009), which is approximately three times the rate at which total retail sales increased over the same period.
The growth rates reflect an industry which has grown both in size and popularity; consumers now regularly purchase own-brand goods. Own-brand products were once limited and considered the basic option, whilst the wider ranges of essential and premium products were generally favoured. A broad selection of products is now available in own-brand ranges, which are being tailored in accordance with changing customer demands. While the grocery market has seen the most obvious growth in this area, other non-food sectors have expanded own-brand selections.
Supermarket chains have seen growth in non-food own-brand sales, particularly relating to clothing; most have established their own, well-known clothing collections. Other clothing retailers have also increased in size and value; through the steady flow of cheap imports from China and the Far East, supermarkets and specialised companies are increasing their profits and portfolios.
The power in the retail supply structure has shifted towards retailers themselves, who have complete control over own-brand products. Retaining control over price and promotion has enabled retailers to stay competitive when fighting for market share against established brands. Despite generally lower pricing, these ranges also deliver higher profit margins, in addition to increasing overall footfall in stores and securing customer loyalty.
The own-brands market can be seen as having benefitting from the recession; cash-conscious consumers are turning to the cheaper alternatives, enabling the retailers to tailor their own products to the consumer’s needs. In this instance, this comprises offering lower costs alternatives to everyday essentials.
As the economy recovers, own-brand products will have to remain competitive to retain customers, as people may turn back to the leading brands. The prospect of economic prosperity presents retailers with an opportunity to further develop premium ranges. There are also openings for retailers to develop into new market areas — such as electrical items, or to seek global expansion.
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