Dubai: Sales of private label products in the UAE are expected to grow over the next three to five years, driven by higher living costs and a rising population, according to Justin Boutros, chief executive of Channels Exhibitions.
Private-label products are those that retailers (including supermarkets) put their names on. Some retailers own their production facilities.
The highest growing categories of private label products, or store brands, are food and beverage, followed by hygiene and cosmetics products, Boutros said, whose company is the organiser of PLME (Private Label Middle East Dubai), a three-day private label and contract manufacturing exhibition, which kicked off in Dubai on Sunday.
“[The] private-label [business] is picking up [in the UAE],” Boutros said.
However, Colin Beaton, managing director of Limelight Creative Services, a retail consultancy, expects sales of private-label products in the UAE to “have modest growth”, given that retailers in the country don’t have large numbers of stores and enough name brands to compete with.
“Food and beverage, pharmacy and electronics are areas where I expect the growth in sales to be,” he said.
In the last 12 years, the UAE has increasingly seen homegrown brands that have private label products due to the growing manufacturing sector and rising entrepreneurship, according to Boutros. The trend is seen in other countries in the region, such as Saudi Arabia and Oman, he said.
For instance, Spinneys, a supermarket chain in the UAE, said earlier this month that it plans to export more than 300 varieties of its labelled products to the Middle East, Africa and Asia. According to the company, the move is a result of the success of its products in the region, and demand from distributors in developing countries.
Price is mainly what motivates consumers to buy private label goods, alongside quality. The price of private label goods is around 20-30 per cent lower than that of name brands, according to Nikola Kosutic, research manager for the Middle East at Euromonitor International.
“Consumers are finding private label products to be of comparable quality but of significantly lower price,” Kosutic said.
