Recent years have played witness to a shift in consumer attitudes, as shoppers have begun to seek out fresher, more authentic, and increasingly local experiences. Far from going unnoticed by retailers, they have seized the opportunity to capitalise upon this trend by marketing and promoting the origins of products, making visible the once illusive supply chain. UK grocer Tesco has certainly made significant headway with its private label range to grab a share of this lucrative market. In October 2013, the retailer relaunched its ‘finest’ premium private label – the biggest investment in the brand since its introduction 15 years ago. In total, 75% of the range’s 1,500 products were either new or improved, with a revamp on the packaging to give a more contemporary look. The line is now backed by the ‘Made by Passionate People’ strapline, giving the label a renewed focus on the stories and people behind the actual products. This is a trend being mimicked across the UK grocery market. Earlier this year Sainsbury’s launched a campaign which promotes its ‘Basics’ label as ‘Good Values at Great Value,’ marketing the private label range as not only affordable but also ethical by highlighting the origins of the products. Looking specifically at Tesco’s Italian range, the focus is very much on its pasta, particularly its fresh range, which is packaged and promoted to show that it has been produced in Italy. The retailer has leveraged its multi-channel capabilities to highlight this, with instore signage and an online video on its transactional site where consumers are introduced to producer Giuseppe Di Martino who has been working in his family’s pasta factory since the age of ten. Allowing customers this glimpse into the supply chain gives a feel of legitimacy to the goods, instilling a sense of trust between shopper and retailer and ultimately boosting brand loyalty.
The positioning of products within the store is very much geared towards its Finest range, which is shelved at eye level and of which there are more items than any other range. Looking at its economy and value tiers ‘Made in Italy’ signage is written in large letters on pasta goods, albeit on simpler packaging. While this doesn’t give the depth of background seen across the Finest range, this labelling gives access to more ‘genuine’ products for all consumers. Other Italian products available, such as garlic bread and focaccia, are produced in the Uk, presumably due to their shorter shelf lives which makes them trickier to import. Likewise, sauces are also produced in the Uk given the costs associated with importing heavier items.
So how then does Tesco stack up in comparison to other players in the market? Waitrose, an upmarket UK grocer, again pushes its private label pasta by designating significantly more shelf space in comparison to branded goods. This helps subtly nudge the customer toward purchasing own brand to up the retailer’s own profit margins. Unlike Tesco, which promotes its premium range, Waitrose pushes its mid-tier ‘Essentials’ pasta, marketing the product as more of an everyday basic rather than a luxury good. The product is clearly labelled as produced in the Uk. A major part of Waitrose’s strategy is its focus on local, British sourcing so, while still appealing to the authenticity driven consumer, the focus lays on domestic produce. There is a small percentage of shelf space given to branded pasta, which gives more of a feel for Italy with information written in Italian and ‘Made in Italy’ printed on the packaging.
Looking at the opposite end of the market to discounter Lidl, customers can still grab a slice of Italy. The retailer’s value ‘Simply…’ pasta range boasts a ‘Made in Italy’ label, while it’s more economy tier ‘Combino’ label looks more authentic with text written in Italian. Lidl has utilised its packaging to highlight the origins of products but, like Waitrose, little else is done to allow customers to get behind the story. This is undoubtedly in part due to Lidl’s value driven focus coupled with its current ‘healthy checkout’ strategy, which is shaking up the checkout concept to offer only healthy and fresh produce. This dominates its instore promotional material.
With consumers now exercising so much power over the retail landscape, retailers need to respond to their desires to ensure they remain competitive. British grocers are clearly responding to the shift in consumer attitudes towards fresh, authentic produce and are leveraging their private label goods to do so. This emerging trend opens up the opportunity for Italian suppliers to forge relationships with retailers to give shoppers what they’re after. With UK grocery a hotbed for innovation other countries could well begin to follow suit, thus presenting the chance for suppliers to extend these relationships into other overseas markets.
By Clare Nutter, analyst at Planet Retail