Premium private label ranges will become one of the most important retail trends of 2018 in the UK, according to forecasts by international grocery research organization IGD. The organization says that retailers are investing increasingly in premium private label brands, with 75% of UK shoppers believing the quality of those products has improved over the last couple of years.
“Private label ranges are a key area in which retailers can differentiate themselves and stand out in an increasingly complex and competitive retail market,” said IGD. “For own label manufacturers this could provide additional volume but put more pressure on costs. For brands, they will have to ensure their products are superior to justify the price. They are likely to achieve this through showcasing heritage and new products.”
Convenience is the big trend
The big trend toward convenience in new product development is proof that supermarkets are not all about low pricing. That’s the message ex-Sainsbury’s CEO Justin King delivered to an industry group in the UK. He rejected suggestions the current supermarket price war is simply a race to the bottom on price. King stressed that new product development is all about premium, added-value products, as well as convenience formats that inevitably carry a higher price point.
“There is more growth in convenience than the discount and online channels combined,” he said. “We have come to believe that price is playing a more important role than it actually is, but premium ranges are the driver. Almost all current NPD is on premium. There is not a race to the bottom going on. So convenience is the big driving dynamic. I would argue that convenience creates more opportunity for new product development than almost anything that has happened in food in the 35 years or so that I’ve been involved.”