Retail giants bullish on private labels

Written by Mona Mehta | Mumbai | Updated: Jan 17 2010, 04:27am hrs
With rising demand for cost-effective private labels and brands, branded retail giants are betting big on increasing consumption of private labels along with brands by launching new sub brands, apart from expanding the product portfolio under private brands. The demand for private labels and brands grew 40% during Q2 2009-10, experts say.

Private labels in food and non-food products have been around for some time now, but saw new demand when consumers began to go for cheaper options in products around the second quarter this year. This happened mostly in certain FMCG products and pulses, where the prices were high. This brought in an opportunity for retailers to launch new variants in private labels.

Kumar Rajagopalan, chief executive officer, Retailers Association of India, told FE, The demand for private labels and brands grew by 40% during Q2 2009-10 and is expected to rise over 50% during Q3 and Q4 of this financial year. This is because, private labels are priced 12% to 15% lower than the maximum retail price (MRP) of competing FMCG brands. Hypercity Retail India Ltd, part of the K Raheja Corp, is all set to launch a new sub-brand, Hypercity Everyday under Hypercity private label in food and general merchandise categories soon at Hypercity stores in India, BS Nagesh, vice-chairman, Hypercity Retail India, told FE.

Meanwhile, the Future Group too is planning to expand food and non-food categories under private brands for Food Bazaar and Big Bazaar. Devendra Chawla, head private brands, Future Group said, We are actively working towards launching more flavours of noodles and soups under the Tasty Treat private brand soon. In the Care Mate brand, all categories of baby diapers will soon be introduced.Shoppers Stop Ltd is planning to bring in new international brands for the first time in India in the form of private labels.