This story is from July 1, 2008

Rising inflation makes pvt labels more attractive

Aparna Ramalingam / TNN / Jul 1, 2008, 01:40 IST

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Some retailers like Food Bazaar have localised their private label offerings especially in food categories. Food Bazaar has private labels for sauces, pickles and other home care items.

Rising inflation makes pvt labels more attractive

CHENNAI: While private labels are getting increased shelf space, they have also been the biggest beneficiary of inflation. "Certain brands, especially those in staples and savouries are getting substituted by private labels now," says Samar Singh Shekhawat, vice-president, marketing, Spencer's Retail. More than 25% of all goods displayed in its store counters are private labels and this figure is set to rise in the future.
What's fuelling the tilt towards private label is the price differential."On an average, the price difference is close to 15%," says Shekhawat. Spencer's stocks private labels in categories such as staples, ready-to-eat and savouries.
Similarly, Food Bazaar (part of Pantaloon) has seen a rise in consumption of private labels thanks to inflation. "Consumers who don't want to pay more are opting for private labels," say officials from Food Bazaar.
"Private labels can become a good vehicle to drive consumption," add officials from Food Bazaar. Similarly, Subhiksha has around 170 private label products on display in its stores across categories like food items, detergents and personal care items.
Moreover, private labels have a huge impact on bottomline. Industry sources say that in some cases, the margins of private labels are usually double than of branded products. Some retailers like Food Bazaar have localised their private label offerings especially in food categories. Food Bazaar has private labels for sauces, pickles and other home care items.

About the Author

Aparna Ramalingam

Special Correspondent with Times of India, Chennai. Over 10 years of experience in journalism with a focus on business reporting and feature writing. Prior to moving to Chennai in 2007, worked in Delhi between 2000 and 2007.

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