The private labels revolution

Welcome to the results of the study of the private labels market, conducted by PwC.

According to the publication, the global growth in private labels is changing the retail landscape irrevocably. What are the implications for Russian retailers and manufacturers?

With each major recession comes renewed interest in private labels, as shoppers hunt out lower-cost options. While market share rose, more interestingly the majority of customers planned to continue buying retail chains’ brands even after the economy recovers. Since the last recession, a number of other significant factors have come to play, including consolidation of the retail market and increasing sophistication of brand usage. Given their dominant position in the market, retailers are using private labels to increase profits and build customer loyalty. This is no passing trend, but the changed face of retailing. Private labels have become a permanent feature of the competitive landscape.

The survey results show that demand had increased for private label goods in 2009 and 2010 in Russia. This growth was in the range of 10 to 30 per cent depending on the store format and reached 50 per cent in some regions. Many retail chains intend to increase the percentage of revenue earned from private labels in 2011 and expand their range of private label products. Increasing consumer awareness, and the globalisation and consolidation of retailers mean that the trend for private labels in Russia will follow the same growth path as has been seen in US and Western Europe.