Aditya Birla Retail, which operates 670 supermarket and two hypermarket format food and grocery stores, across several states of the country, under the brand name of “More for you,” like most of its big ticket food and grocery counterparts, is looking at enriching its portfolio of private labels, in the coming months.
“We are focussing on private labels in a big way. We want to take the share of private labels to 30 to 40 per cent of our total business in the next 4-5 years,” said Thomas Varghese, the chief executive of Aditya Birla Retail.
The retail chain, as reported earlier, is expanding its retail network by setting up 12 more hypermaket and 200 more supermarket stores in the next financial year (2009-10).
To begin with, Aditya Birla Retail will be enhancing its existing portfolio of personal care products like shampoos and soaps under private label of ‘Enriche’ by adding new products like hair oil, hair styling gel, shaving creams, gels, and toothpaste, among others, says a BS report. These products are expected to be launched by March, this year.
Apart from personal care products under ‘Enriche’ brand, the company is also selling products in private labels in several other categories like processed foods (ketchups, jams, honey, carbonated drinks, chips, cookies, etc.) under ’Feasters’ brand; and washing products (detergents, dishwash bars, etc) under ‘110%’ brand. In fact, there are currently 320 products being sold by ’More for you’ retail chain under private labels.
ABRL is also looking at entering into the private labels business in consumer electronics and durables business after it has complted its proposed expansion in FY 2009-10.
The success or otherwise of private labels business depends largely on the chain’s pricing strategy and extent as well as reach of its retail network. In times of economic slowdown, it is easier to push private labels as consumers wanting to conserve resources are prepared to “downtrade.” Downtrading refers to a practice in which customers in order to save on money are prepared compromise either on the brand name, i e buy products of relatively unknown brands (in this case private label), or are ready to compromise on quality or quantity of features (specifications) in a product they are buying. For example, one may settle for a CRT TV instead of LCD TV or buy a 32″ TV instead of 37″ TV.
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4 responses so far ↓
Dharnendra Doshi // Feb 5, 2009 at 10:13 am
While there might be visible slowdown in the market, i think the retailers need to maintain the right balance between branded and private label products. Having too many private label products may help improve the margins but surely puts off a lot of customers as well. ABRL stores already carry too many private label stocks and i am not sure if increasing it further will help the company.
A large set of customers might be put off by such proposition and might label the store as not having variety
Mahima Pal // Feb 7, 2009 at 5:12 pm
Preferance will remain same for loyal customers irrespective of prevelant market conditions(though they may compromise with size and packs).For non-loyal customers private label can play a good job.Only few % of Indian people have preferance for brands.In such a case private label can increase top line for company and satisfaction(monetary and quality) for customers,provided they are of good quality and fits into pocket.
Rakesh Agarwal // Apr 8, 2009 at 11:14 pm
I have persoanly tried ABRL private label products and i believe they are completely upto the standards of any brands. I think they should do something to induce people buying into it
kannan // Aug 25, 2009 at 10:46 am
Sir,yesterday i bought some goods in yours MADURAI Store Mr.Prem & Anand help me to purhase i thought both were good person but finally they make a wrong deal that is if i give 100 rupees they give some product whithout bill i accept that deal the purchase amount is 600 arund but they give a bill only 200 rupees only . if the MORE going like this you may close the store very soon.
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