Private label supermarket products have come a very long way since Pick n Pay pioneered its No Name brands in 1976.
These days the “house brands” aren’t limited to the boringly packaged cheapies. They’re also premium products taking on the high-end established brands. Think Checkers’ Forage and Feast and Pick n Pay’s Crafted Collection. But it’s the private label essentials which sell in the highest volumes.
According to Nielsen’s NIQ Mid-year Consumer Outlook 2023:
- 52% of consumers think store brands are usually good value for money;
- 48% of consumers consider store brand products to be a good alternative to name brands; and
- 39% think some store brand products are of higher or equal quality to name brands.
“Consumer perceptions of the quality of private label products have warmed over the years,” said NIQ South Africa MD Zak Haeri.
“And the value offered has made them an increasingly viable option on the shelf.”
Private label products have in most cases outpaced the sales growth of other brands in the market. Given the trajectory, Haeri predicts private labels could make up 25% of all grocery sales within 10 years, “presenting unique challenges and opportunities to those who recognise this emerging tectonic shift”.
It goes beyond being more price aware. Shoppers have a greater understanding of own brand products and the value they offer in terms of quality
— Nicki Russell, Pick n Pay’s head of product and quality
Key to getting that right was differentiation, innovation and “the quest for a distinctive niche that sets you apart from being perceived as a mere budget-friendly alternative”, he said.
Pick n Pay has surpassed that 25%. Its private label and “confined label” ranges — ranging from everyday No Name essentials and premium luxury food items to fresh produce — account for almost 30% of its sales, up from 18% six years ago.
“We launched just over 1,000 private and confined label products this year and plan to launch about 1,100 new products next year,” said Nicki Russell, Pick n Pay’s head of product and quality.
Spar’s private label products make up 21.8% of all groceries sold, an increase of 3.8% in the past five years.
At Shoprite/Checkers/USave they account for 20.9%. The Shoprite Ritebrand, Checkers Housebrand and Usave Ubrand product ranges are all top sellers in basic items.
At the other end of the groceries spectrum, its premium Forage and Feast range, sold exclusively in Checkers stores, has garnered a big customer following and established itself as the benchmark for premium supermarket food products.
The differentiation in its private label offerings doesn’t end there. Five years ago Checkers launched its Simple Truth wellness range and its Homegrown range sources from small suppliers.
“More customers are switching to private labels, with 96% of all customers buying at least one of the group’s private label products,” said a Shoprite Group spokesperson.
“For example, the sales contribution of Shoprite Ritebrand tuna grew from 41.4% in the 2021 financial year to 55.5% in 2023.”
While Spar’s most sold private label products are staples including long-life milk, sunflower oil, sugar and frozen chicken portions, its comprehensive innovation programme sees a host of new products being launched under the Spar brand.
“Trends are watched closely and new products relevant to the South African market are launched quickly,” said Robert Brink, the Spar group’s national merchandise executive.
“Private label can and should lead innovation, driven by shorter innovation cycles and lower barriers to entry than propriety brands.”
With basket staples, one can generally rely on the private label products to be cheaper than their branded counterparts, beaten only when the latter are available on a particularly good special.
However, watch out for pack sizes. For example, the PnP NoName chutney is 430g, while its competitors, including Spar and Checkers’ own brands, come in a 460g jar.
How are the low prices achieved?
“By stripping out the marketing costs associated with branded products,” Brink said, “coupled with our logistics network which we optimise to achieve our price points through our wholly owned private label division.”
Shoprite said it negotiates the best possible prices with its suppliers.
All three said consumer perception of private labels had improved dramatically over the years.
“Pick n Pay customers are shopping own brand products more than ever before, but it goes beyond being more price aware,” Russell said.
“They have a greater understanding of own brand products and the value they offer in terms of quality. It’s an equation of price and trust, knowing they will get something good.”
The Spar Group said consumers had bought into private label, “ understanding it offers significant value for money while quality has not been compromised at all. We even offer a double-your-money-back guarantee on our own products. They have high specifications that need to be adhered to to live up to our promise. We pride ourselves on being ‘as good as the best for less’.”
A sample price comparison between the three supermarkets' private label products:
Grated/sliced beetroot in vinegar, 780g jar
- Spar: R38.99
- PnP: R41.99
- Checkers Housebrand: R32.99
Sunflower oil, 2 litres
- Spar: R84.99
- PnP No Name: R78.99
- Checkers Housebrand: R79.99
Rice, 2kg
- Spar long grain: R34.99 (Special price until February 6)
- PnP medium grain: R38.99
- Checkers Housebrand medium grain: R38.99
Full-cream long-life milk, 6-pack
- Spar: R109.99
- PnP: R93.99 (January R95,99)
- Checkers Housebrand: R89.99
Dishwashing liquid, 750ml
- Spar: R33.99
- PnP NoName: R24.99
- Checkers Housebrand: R24.99
Kitchen towel, 2-pack, 50 sheets per roll, 26x22cm
- Spar: R24.99
- PnP: R21.99
- Checkers Housebrand: R24.99
2-ply toilet rolls, 18-pack
- Spar: R149.99
- PnP: R119.99
- Checkers: R129.99
Contact Knowler for advice with your consumer issues via email consumer@knowler.co.za or on X (Twitter) @wendyknowler
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