Talking Retail February 2008

Will 2008 be the year that marks the start of the decline of own label brands?

In the last decade we have seen massive growth in own label.  Brands like ‘Finest’ and ‘Taste the Difference’ have seen eye-watering growth.

Non-supermarket brand owners have been faced with a stark choice:  produce own label or go out of business.  Suppliers have gone from brand owners to brand servants, doing the bidding of the mighty supermarkets.

With the growth of own label brands supermarkets have found that the relationship they have with the consumers has changed – from being the consumers’ friend to becoming a necessary evil.  Supermarkets are now finding that they are being blamed for some of society’s ills: obesity, the decline in the farming industry, and now, cruelty towards animals.

Only two weeks into the New Year and a devastating series of programmes on Channel Four has pointed the finger firmly at the retailers, blaming them for how, in this instance, standard chicken is reared.

In the past the accepted wisdom of those in the food business was not to expose consumers to the life and death of the food they eat.  Don’t put a picture of live animals on packaging because it would put people off buying the product.  The only things that consumers need to concern themselves with are whether the product tastes good and a reasonable price.  But have programmes like Hugh Fearnley-Whittingstall’s Crying Fowl and Jamie Oliver’s Fowl Dinners changed the rules?  These programmes took the consumer all the way through the process of producing a chicken:  the birth, the life and the death.  In the past the only people who were concerned about the life and death of the food they eat were on the fringes.  Jamie and Hugh have now made it mainstream.  When my postman said he would never ever buy a standard chicken again I knew that their message had got through.  A lot of consumers didn’t like what they saw and the supermarkets were blamed for it.

Some supermarkets like Sainsbury’s and Waitrose were clever enough to see that these programmes were going to have a long term impact and decided to act, committing to changing their standard chicken to a RSPCA Freedom Food approved system, while Asda and Tesco decided to stick it out, citing their customers as the reason for doing so.

One of the strong messages that kept coming out of the Jamie Oliver and Hugh Fearnley-Whittingstall programmes was for the supermarkets to show leadership.  Supermarkets must have the most sophisticated research and employ the most talented advertising agencies to tell them everything they need to know about the consumer, but, in my view knowing your consumer isn’t enough.  Giving them what they want isn’t enough.  Feeding back to them what they want is not enough.  The vital ingredient is leadership, and leadership is sometimes leading the consumer in a direction that they may not be even aware of.  That takes vision and courage..

I don’t want to see the demise of the supermarkets.  After all if they go, I go.  So since it is in my interest for them to prosper, here is some free advice.

The best kind of purchase is a feel good purchase – no guilt, no stress.  The relentless bad news about supermarkets will make the trip to buy the weekly shop a chore. Supermarkets need to get out of the firing line and the best way of doing that is to return to their roots, their core, which is that of a facilitator, a place where consumers can come and buy an assortment of different brands.  That was what the good old supermarket was doing for the hard-pressed consumer.  If there happened to be a problem with a product, well that was the brand’s fault and the supermarket was protected from blame.  Welfare issues, obesity, farming problems… nothing to do with the supermarket.

The own label revolution may have been the innovation that brought great success in the last decade, but is it the innovation that could be the supermarket’s downfall?

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~ by theblackfarmer on January 18, 2010.

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