Pvt labels give brands tough time

CHENNAI: ITC Foods' Aashirvaad Atta is not just competing with the likes of Pillsbury and Kissan Annapurna, but also with Smart Choice. Smart Choice is the private label of Spencer's and is steadily gaining market share with their customers. Spencer's started private labels in just a few categories of staples, sauces, noodles, pickles and some homecleaners around five years ago.Today, the company says their labels are brands in their own right and giving some of the top brands in the country stiff competition.
"Our four labels in the home category (food and non-food ) are given prominent shelf space, at the eye level, colour coordinated focus areas and are laced next to the brand leader of each category. Private labels are no longer generic product offerings that competed with their national brand counterparts by means of a pricevalue proposition. They no longer carry the stigma of inferior quality," says Sanjay Gupta, v-p at Spencer's .
Private labels typically enjoy a cost advantage since the retailer saves on marketing and advertising budgets. "Our private label products are cheaper by 15% to 25% and sometimes more if one were to take the promotions into account," says Viney Singh, managing director of Max Hypermarkets, that runs the Spar chain of supermarkets . "For instance, on most cleaners the price advantage is anywhere between 20% to 25%."