A private label covers several tasks for a retail chain. It is what differentiates you from competitors, it's an opportunity to build up a range of products and become unique. Often such goods are cheaper than their branded counterparts, but they are usually just as good in quality. Consequently, they allow customers to save money, and the retailer to increase customer loyalty and attract them to its shop.
The category is growing, and retailers' approach to working with private labels is evolving. Several main trends can be pointed out. First, private labels are no longer about the lowest price. According to Lenta, while private brands used to be primarily first-price products, now mid-priced products have taken the bulk of the market. The retailer also considers the development of private label in the high price segment potentially interesting, which is a relatively new niche for private label brands.
Magnit also sees great potential in developing mid- and high-price segments. "Whereas previously private label was perceived as low-priced and therefore not of the highest quality, now many people have come to understand and appreciate that buying own-brand products does not allow them to overpay for the brand," agrees Magnit. The company says that customers and manufacturers of the private label products themselves contributed to this to a large extent - private label products received similar or higher scores than branded products in blind tastings.