In the May/June 2024 edition of ESM, we spoke to several prominent operators across Europe about how they are enhancing their private-label offerings, including Halyna Obodets, Director Of Private-Brand Department, RUSH LLC (EVA).
What recent trends in private label have you observed in your business, and also the wider market?
Over time, more and more private brands with a clear positioning are appearing on the market, focused on a specific target audience and developing as independent brands, in line with a defined strategy. This approach is mostly typical for private brands in the mid-range and premium price segments.
Private label is no longer just the best product offer at a favourable price, it is a fully fledged brand that develops according to the laws of brands and competes with them in its price segment.
Moreover, private brands are the first to pick up on raw-material innovations and the latest trends in the packaging materials market. In this respect, they are much more flexible than the brands of transnational corporations.
Most European countries have seen inflation ease in recent months. Do you think that this will affect private-label purchasing, as brands become more competitive?
In my opinion, this will rather cause a change in the strategies of private brands’ management against the background of growing competition with branded products.
As for the Ukrainian private-label market, it is in a relatively more favourable position, as we have a reversal of the situation with rising inflation, and this creates very favourable conditions for private brands that offer the best competitive offers to the consumer.
If the popularity of our own brands in the European market decreases, our partner manufacturers will be able to compensate for the decline in production volumes for European customers by increasing orders from the Ukrainian market.
In what categories has private label performed particularly well for you over the past year, and why?
In almost all product categories, we have a positive growth trend in the share of our own brands. In general, over the past year, the share of private brands in the chain’s turnover has increased by more than two percentage points.
We currently operate a product portfolio of 65 own brands. Brands in the beauty categories of decorative cosmetics, skincare and haircare are showing excellent dynamics. In these product categories, we have one of the highest growth rates and successfully compete with the brands of multinational operators.
The Ukrainian market is experiencing a growing demand for first-price goods, which is directly related to the state of the economy during the war. However, amidst the dynamic growth in prices for branded products, we are seeing a rapid increase in consumer interest in private-brand products in the mid- and premium price segments.
Customers who have previously shown a stable commitment to certain brands are now more flexible in their choice of products and are more willing to experiment, looking for compromises. For private-brand products, this opens up opportunities to increase their loyal audience, who will appreciate the high quality of the range and reasonable prices.
What opportunities do you see for retailers to maximise the growth of private label in the years to come?
For retailers who have so far focused their efforts on developing their own brands in the low-price segment, now is a great time to create and develop their own projects in the high- and premium-price segments. Consumers are now as flexible as possible in their choices and are willing to try private-brand products in any product category.
Therefore, if you were hesitant before and were not sure whether your customer was ready to replace their favourite brand with your offer, now is the perfect time to make the best offer.
