As part of our dedicated Private Label Issue, ESM spoke to industry leaders at a number of retailers across Europe about the innovations that they are bringing to the table, and why they believe that private label can be a kingmaker in a changing retail landscape. This article first appeared in ESM May/June 2022.
Martine Loyer, Global Director of Private Label, Carrefour France
Do you think that consumer preference for private labels increased during the pandemic?
During the pandemic, the lockdowns of 2020 tended to lead customers to turn more to private labels. Several reasons can explain this – firstly, the need to regain purchasing power, which resulted in the search for low-cost products. This parameter is all the more important as more meals in 2020 were taken at home, which increased the food expenses of everyday households.
In addition, there was a temporary slowdown of national brands’ promotional activity, which was linked to a panic-buying context in spring 2020. The end of lockdowns marked the return of this promotional activity.
During the pandemic, consumers have thus rediscovered the wealth and the strength of the retailer offer and have increased the share of private labels in their shopping cart.
Despite a stronger competitive context last year, marked by a return of national brands, sales of private labels in France increased by 2.1% in 2021, compared to 2019 – according to Nielsen data – and Carrefour’s own brands have turned out to be among the most dynamic and attractive. Carrefour’s excellent performance in a highly competitive environment is the result of the dynamic development of its own brands over the past three years.
The retail sector has had to deal with significant food price inflation in recent months, which shows no sign of easing. How have you had to adapt your private-label range to accommodate these cost increases?
Indeed, inflation associated with penurious markets is a real issue in the short and medium term. Preserving the purchasing power of its customers is one of Carrefour’s priorities. The company aims to limit price rises while guaranteeing farm producers’ fair remuneration.
This commitment is specifically exemplified through its own-brand products. In the face of the inflationary context, Carrefour’s product teams are working to find solutions that will enable the brand to respond to household budget concerns.
In this perspective, Carrefour has accelerated the deployment of Simpl, its first price brand, which proposes nearly 730 everyday products at low prices – 5% to 10% cheaper than hard discounters’ prices. In order to make the range more attractive, we have also increased the number of references, with more than ten new-product launches and improved visibility on the shelf.
How have you sought to improve the ‘eco’ credentials of your private-label offering, given increased demand for sustainable options?
In order to improve its food offer, Carrefour developed Carrefour Bio, which is the leader in organic products in hypermarkets and supermarkets in France. It is a key part of the company’s strategy to become the leader of food transition for all.
Through its offer of 1,200 SKUs – the widest range of organic products in supermarkets and hypermarkets – the Carrefour Bio brand aims to make organic products accessible to everyone, every day, thanks to its low prices.
For example, more than 400 references are sold at a price below €2. More than 75% of the Carrefour Bio range is also produced in France. Finally, because sustainability also involves packaging, Carrefour Bio is constantly innovating in that purpose. Nowadays, over 80% of the brand’s packaging is recycled, recyclable or compostable.
With regard to cleaning products, Carrefour developed a brand that is more respectful of the environment, called Carrefour Eco Planet. Since its creation in 2005, the group has constantly expanded this range of products to meet the growing demand from consumers. In 2021, the brand launched innovations such as a sponge made of recycled fibres, as well as cleaning sprays composed of 100% natural-origin active ingredients and marketed in 100% recycled plastic and 100% recyclable bottles.
In October 2021, Carrefour also launched new products under the Carrefour Essential brand, which are more eco-friendly and promote a do-it-yourself message. This consists of six products that are priced at less than €1.
What has been the biggest private-label innovation at your company over the past year? Are there any new-product launches that have proved particularly successful?
Innovation is at the heart of Carrefour’s own-brand strategy. The most recent or emblematic examples of it include the creation of new eco-responsible and ecological ranges under the Carrefour Soft Green brand. Carrefour developed a solid shampoo, a bamboo toothbrush, and, recently, a solid deodorant, each priced at less than €3, with more than 1.5 million units sold in one year.
Other innovations include the launch of the first agricultural organic line through the Carrefour Bio brand – the first private label in France to support farmers with fairer remuneration and volume commitments.