Gulf to see private label boom

Sales of private label products, also known as store brands, are set to boom in the GCC, driven by the increased cost of living, according to ACNielsen, a marketing information provider.

The firm's study, 'The Power of Private Label 2005,' collected retail measurement sales data from 38 markets, covering five regions Europe, North America, emerging markets, Asia Pacific and Latin America and found that sales of private label products are increasing worldwide.

"Private label share to the overall super/hypermarket grocery sales in the GCC is 3-4 per cent," said Hubert Lobo, head of retailer services for ACNielsen. "However, growth is expected to surpass the global average at 15 per cent.

In the Middle East, Lobo said the lower prices on private labels was drawing in consumers.

"In this region it is important to keep in mind that the consumer is constantly seeking greater value propositions," said Piyush Mathur, managing director of ACNielsen GCC.

"In this region it is important to keep in mind that the consumer is constantly seeking greater value propositions. This will become even more salient given the increasing cost of living and will further give a boost to the growth of private labels," he added.

In more than two thirds of the markets studied, private label sales more than doubled the growth rate of their manufacturer brand counterparts.

Furthermore the study revealed that private label goods make up 17 per cent of total value sales for the 12 months ending March 2005, with a 2 per cent increase from the last ACNielson report published in 2003.

ACNielsen also looked at purchasing trends via consumer panel information gathered from 14 markets across the globe. The results were that 100 per cent of households in two thirds of the markets reviewed had purchased private label goods during the past year.

"Strategically, retailers worldwide seem to be placing more and more of an emphasis on branding and marketing their private label wares to match the lifestyles and values of their shoppers," said Jane Perrin, managing director, ACNielsen Global Services and sponsor of the ACNielsen Executive News Reports.

Some of the 80 categories covered in the study include beverages, snacks, baby food, cosmetics and refrigerated food, which accounts for many of the most popular private products.