Private label pioneer opts for brands

Posted by Daniel Palmer on 29th May 2008

As major Australian supermarkets continue their push away from nationally advertised brands toward private labels, UK retailer Marks & Spencer, the quintessential private label retailer, has tentatively reversed the trend by committing to using branded products for the first time.

The famous UK institution has announced that they will trial an offering of around 350 branded products in 19 of their stores in June. “This trial aims to offer customers greater convenience but not to change the unique positioning of the M&S brand in Food,” M&S stated in their annual report.

Marks & Spencer believe that their customers are demanding household brand names of the ilk of Coca-Cola, Marmite and Heinz Ketchup. “I’ve had customers come up to me and say ‘Stuart, I love your food but my Johnny loves Marmite,'” Chief Executive of M&S, Sir Stuart Rose, told The Sunday Telegraph.

“M&S” products are a brand in their own right built over decades with sound marketing and a high quality consumer offer. Their strategy shift is one that other retailers should monitor with interest as they attempt to turn glamorously packaged ‘home brands’ – which were little more than price promoted commodities than brands – into more desirable ‘private label brands’ that now occupy vast amounts of precious supermarket real estate.

The consumer jury is still out on whether these supermarket brands will develop their own loyal following and achieve true ‘brand’ status or whether they will always be selected on price alone.

Coles and Woolworths have come under increased scrutiny regarding their private brands following implications from the Victorian Farmers Federation that they provide the same product under three different brand names with three different prices.

Coles and Woolworths have refuted the claims but Coles Chief Operating Officer, Mick McMahon, did admit on Monday that it was possible for the same milk to be used in both their ‘Smart Buy’ and ‘You’ll Love Coles’ brands. Mr McMahon stressed, though, that the two brands were definitely sourced and packaged in a different manner.