The big four supermarkets look set to turn their attention away from price in 2012, focusing their energies on improving their own label offers instead, according to an industry expert.
The supermarkets’ price message had been diluted by the plethora of price drops and matching schemes, meaning that they would need to find new ways of differentiating themselves, Ed Garner, Kantar Worldpanel communications director told elegates attending Sweet Charity’s Supporting Independent Retailers Conference.
Tesco in particular, had “run into a brick wall” he said. “There are only two ways in which a retailer can make money; growing shoppers, and growing spend. Nine out of 10 people already shop at Tesco, and it won’t get the 10th unless it holds a gun to their head. Adding new stores won’t help, all that does is just spread shoppers out. The only way that Tesco can grow now is to take more money from existing shoppers, and it can only do that with its premium brands.”
“Tesco and the other multiples will create brands out of their own brands this year. These won’t be like the apologetic own label brands of the past, but real strong brands with values,” he added.
However independent convenience store retailers also had a great opportunity to grow their own sales this year.
Those that engaged with the local community, and focused on new areas such as fresh fruit and vegetables, and chilled ready meals, could fight back, Garner added.