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Woolworths Changes Private Label Brand To Fend Off Aldi

Published on Mar 29 2016 4:14 PM in Private Label tagged: Retail / Aldi / Australia / Woolworths

Woolworths Changes Private Label Brand To Fend Off Aldi

Woolworths Ltd., Australia’s largest supermarket chain, will scrap its Homebrand private label brand after 33 years in use.

The move, according to the Sydney Morning Herald, is in a bid to change customer perceptions that rival supermarket Aldi offers better quality and value in its private label range.

Woolworths will rename almost 1,000 Homebrand products to its other private label brand, Essentials. The change comes after Woolworths' recent efforts to narrow the price gap between discount retailer Aldi and itself.

The brand, according to analysts, had faced a perception problem, as customers viewed the products to be of lower quality. Credit Suisse analyst Grant Saligari said the new Essentials brand can address the "weakness" around Woolworths' private label offerings.

"The issue with Homebrand is not so much price but a perception built around the product branding and packaging," said Saligari.

According to Margan Stanley, the Australian retailer has reduced the price of its private label by 4.6 per cent since May last year. The company recently reported its first loss since 1993.

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by John Golden. To subscribe to ESM: The European Supermarket Magazine, click here.

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