Last week we showed that the price gap between National Brands and PLs is more pronounced in Discounters than Supermarkets. This is driven by substantially lower priced PL offerings in Discounters.
When thinking about playing in the discount channel certain brand characteristics contribute to the likely success of these introductions for both the manufacturer and the discounter.
Higher National Brand vs Private Label price distance in Discounters a consequence of relatively lower Private Label pricing
PL prices in Supermarkets tend to be higher than in Discounters: In the average category PL prices of the three largest Supermarkets in a Western European country are between 10% and 17% higher than the country PL average. NB price levels are not consistently different.
National Brand (NB) prices more often above average in some, but not all Supermarkets
Across 80 categories, the two largest Supermarket chains in a Western European country sell brands at prices above the country average in a majority of categories. The smaller Supermarket and the two Discounters offer their branded assortment at below the average of country brand price levels in a majority of categories.
Not all Brands are equally prone to produce win-win situations when sold in Discounters
A study of National Brands’ performance in Discounters across five Western European countries showed that specific characteristics of brands result in share gains for both the discounter and the manufacturer.
