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.
Mark Maczelka, Head of Communications, SPAR Hungary
Do you think that consumer preference for private labels increased during the pandemic?
There has been no decline in private-label sales, which also proves that the popularity of private-label products is unbroken. At the same time, current experience shows that the majority of customers are turning to private-label products with a favourable price value in the deteriorating economic situation.
As a result of the pandemic, there has been a huge emphasis on the purchase of domestic products. The situation is increasingly encouraging Hungarian buyers to buy domestic products. An increasing percentage of consumers check the origin of food when making a purchase decision.
Hungarian manufacturers and domestic values have long been important to SPAR, so we strive to be able to cooperate with more and more domestic suppliers.
The retail sector has had to deal with significant food price inflation in recent months. How have you had to adapt your private-label range to accommodate these cost increases?
The uncertainty caused by the epidemic situation has already changed consumer decisions and shopping habits, and the year 2021 brought the highest annual price increase ever.
The steady rise in prices isn’t just hurting low-income shoppers. Customer price sensitivity has generally increased. There have been increased consumer expectations for private-label alternatives – and especially for lower-priced products. Considering this trend, we have expanded the range of our popular S-Budget product line with nearly 200 SKUs in the last two years. This proved to be a good decision in the current economic situation.
How have you sought to improve the ‘eco’ credentials of your private-label offering?
During the time spent at home, because of the pandemic, many customers turned to a greener, environmentally friendly lifestyle, and also recognised the fact that environmentally conscious shopping plays a significant role in sustainable development.
In this sense, we try to take environmental aspects into account during product development, to the best of our ability. Our goal is to long-term ban environmentally negative materials from the packaging of our own-brand products, and to avoid using more packaging than is actually needed.
We also want to contribute to sustainable management by encouraging the purchase of domestic products. These goods reach customers in a shorter transport route, polluting our environment less.
What has been your biggest private label innovation of the past year? Are there any launches that proved particularly successful?
In 2021, we expanded our range with our own-brand food supplements that support sports. This product family includes protein slices, beverage powders, pancake powders and vitamin waters.
Elsewhere, fresh, ready-to-cook SPAR Premium fish fillets, sourced from sustainable fishing and farming, are also now available in our stores. The environmentally friendly packaging of the products contains at least 70% less plastic than the traditional tray versions, and also provides a longer shelf life for fish fillets.
Finally, more and more people suffer from food allergies or food intolerances, or they are sensitive to certain food groups. Based on these needs, the development of the SPAR Free From gluten-free breaded chicken breast filled with lactose-free cheese is a unique innovation in Hungary. The success of this product is confirmed not only by customer feedback, but also by the fact that it won a Hungarian Free-From award in 2021.