x Abu Dhabi, UAEMonday 24 July 2017

Shoppers switch from big brands

Budget-conscious supermarket shoppers begin shifting away from big-name brands to cheaper own-label goods.

People are more concerned about what they spend and what they get back, a supermarket manager says.
People are more concerned about what they spend and what they get back, a supermarket manager says.

Budget-conscious supermarket shoppers have begun shifting away from big-name brands to cheaper own-label goods, supermarket executives say. The trend has been brought on by the recession, with shoppers looking to cut back on spending. Companies that sell consumer staples have responded by stocking up on their own private label products instead of brand names. V Nandakumar, the corporate communications manager at Emke Group, which runs Lulu Hypermarkets, said private label sales had increased by between 30 per cent and 40 per cent this year. "People are more concerned about what they spend and what they get back," Mr Nandakumar said, adding that Lulu was increasing the number of these products on its shelves. The shift in product lines available in UAE stores is happening in supermarkets worldwide, but on a much larger scale, said Shonil Chande, a food and drink analyst at Business Monitor International. Mr Chande said the Gulf had one of the world's more favourable economic forecasts and a less mature grocery sector. He estimated supermarket sales in the UAE would rise to US$1.49 billion (Dh5.47bn) this year from $1.37bn last year. "There are fewer stores, so most of the retailers in the UAE will perform better than a similar sort of retailer in western Europe or the US," he said. To counter the downturn, local supermarkets were placing a greater emphasis on value. "Supermarkets have certainly had to review their products and pricing in view of the economic downturn," he said. "While many supermarkets will have certainly cut back on some higher value goods, they will have been placing an equal emphasis on providing value through attractive deals." Georges Mojica, the general manager of Abu Dhabi Co-operative Society, said he was also expanding its own-label lines to cash in on customer interest. Sales from its value brand line of products had risen by 20 per cent in the first half of this year compared with the same period last year, he said. "Our private labels are moving faster than the other products on the shelf," Mr Majica said. "In a difficult situation like we are going through at the moment, people are more inclined to save a little bit here and there." Procter & Gamble (P&G), one of the largest consumer goods makers in the world and home to brands such as Pantene and Tide, will be including more value brands, said Al Rajwani, its general manager for the Arabian Peninsula and Pakistan. "We've had them in the past but we are offering them more aggressively," he said. The US-based multinational firm announced this week it would start testing Tide Basic, a cheaper version of its laundry detergent, and sell it for 20 per cent less at 100 stores in the US, according to the Associated Press. Kash Shaikh, a spokesman for the company, said Tide and other P&G products had lost sales to cheaper alternatives as households cut back their budgets. Jannie Holtzhausen, the chief executive of Spinneys Dubai, said he had not seen a shift in spending towards lower-priced items, but the number of customers was down about 9 per cent. "We experienced in some of our stores that sales are flat but the spend per customer has stayed pretty static," Mr Holtzhausen said. "Certainly in Dubai, we have less people going to the checkout." aligaya@thenational.ae