International Private Label Consult (IPLC) has revealed a significant disparity between the quality of budget private-label products and their name-brand, and even discount-brand, counterparts.
In its report, How Mainstream Retailers in Europe Respond to the Discount Retail Phenomenon, IPLC looked at a number of retailers from around Europe to compare name-brand lines with private label in terms of price and quality.
The products were also judged against Lidl’s private-label range, which represented the average quality and price expected from discount retailers.
IPLC found that the private-label equivalents of name brands are an average of 33 per cent cheaper, while budget private-label lines (such as Tesco’s Everyday Value range) are an average of 62 per cent cheaper. Meanwhile, the average price of private label in Lidl is 54 per cent lower than name brands.
Along with the price comparison, a quality comparison on a number of budget private-label products was made, based on ingredients listings and packaging. The researchers discovered that in many cases, budget private-label products were of lower quality than Lidl’s offerings.
IPLC found budget private-label ketchup made with fewer tomatoes than Lidl’s, lower-grade chips and cornflakes, a lower percentage of hazelnuts in chocolate spreads, and lower fruit content in jam.
Mainstream retailers appear to be eager to communicate the value message using very basic packaging and design. The report found that packaging on budget lines tends towards a minimalist, no-frills design, which may use limited colour or only simple graphics.
The research also revealed that for all products included in the report, the quality of Lidl products appeared to be either the same or better than that of name brands, something that has no doubt helped to accelerate its growth in recent years.
The report concluded that mainstream retailers can no longer rely on low-quality value ranges when customers can go to discounters for both low prices and quality products.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.
