1 / 19

Trends in Retail Competition: Private Labels, Brands and Competition Policy

Trends in Retail Competition: Private Labels, Brands and Competition Policy A Symposium on the Role of Private Labels in Competition between Retailers and between Suppliers The Institute of European and Comparative Law in conjunction with the Centre for Competition Law and Policy

talen
Download Presentation

Trends in Retail Competition: Private Labels, Brands and Competition Policy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Trends in Retail Competition: Private Labels, Brands and Competition Policy A Symposium on the Role of Private Labels in Competition between Retailers and between Suppliers The Institute of European and Comparative Law in conjunction with the Centre for Competition Law and Policy Oxford, 9 June 2005 Sponsored by Bristows CCLP (S) 04/05 (I)

  2. Private Label Their Role for Retailers & Their Impact Upon Competition Part I

  3. Structure of Presentation • The Structure of Grocery Retailing • The Integration of Grocery Retailing • The Role of Private Label • How Private Label is Developed • The Impact Upon Competition

  4. The Retail RevolutionThe Nature of Change • The Growth of Chains • Evolution of Large Formats • Dedicated Distribution Systems • Retail Chains as Retail Brands

  5. The Retail RevolutionConsequences of the Nature of Change Growth of Chains Large Formats Integrated & Dedicated Distribution Retail Brands Increased buying power Focus on price as competitive weapon Decline in number of small stores Shift to Out of Town Exclusive Sites The Application of I.T. Control of Retail Stores Speed & Frequency of Replenishment Decline of Wholesaling Differentiation by Format & Location Private Label Loyalty Programmes

  6. Retail Concentration Market Concentration 2002: The Top Five Retailers

  7. Retailer Scope -The Virtuous Circle Price Competition Growth Efficiency Asset Investment Supply Chain Dominance Gross Margins Private Label Fresh/chilled Differentiation

  8. Integration - Up-stream I N F O R M A T I O N I N T E G R A T I O N INTEGRATED STOCK CONTOL SCANNING DAILY DELIVERY H.Q. CENTRALISED BUYING SUPPLY CONTRACTS WITH PRODUCERS

  9. Consequences of IntegrationRef. Private Label • Supply Chains Exclusive to Individual Retailers • Collapse of Wholesaling • Direct (and Potentially Exclusive) Contracts with Producers • Farmers • Manufacturers

  10. The Model is Changing Stage 1 - The Classic Structure of Distribution Consumers (Shop in several stores) Stores (Can purchase from different wholesalers) Wholesalers Suppliers (Supply all wholesalers)

  11. The Model is Changing Stage 2 - The Erosion of Horizontal Competition Consumers (Shop in one stores) Stores (Supplied by chain RDC) TESCO ASDA SAINSBURY Distribution Centres Suppliers Branded Suppliers try to supply all chains. Chains seek exclusivity from P/L Suppliers

  12. The Model is Changing Stage 3 - The Emergence of Vertical Silos Consumers (Shop in one stores) Stores (Supplied by chain RDC) TESCO ASDA SAINSBURY Distribution Centres Suppliers Branded Suppliers supply some chains. P/L Suppliers

  13. The Role of Private Label for Retailers • Differentiation – Reduces Price Competition • Customer Loyalty • Higher Margins • Consumer Value

  14. Cost Differences:Brands vs. Private Label Source: UK Competition Commission

  15. DifferentiationPer Cent Sales in Private Label Products UK Germany France Safeway Tesco Sainsbury Asda Somerfield National Av. 47 51 54 54 36 45 Aldi Rewe Tenglemann Metro Markant 90 22 19 14 6 33 Carrefour Auchan Intermarche LeClerc Casino 20 16 29 18 23 22 Nielsen Sources: Nielsen/Competition Commission Secodip

  16. How Private Label is Developed • Product and Packaging Specification is Developed Jointly with Potential Supplier • Suppliers Asked to Tender for the Cost of Supply • Product Responsibility (Adherence to Spec, Safety etc) Passed up the Chain e.g. Sudan Scare • Concept of Vendor Assurance Contrasts with Concept of Brand Ownership

  17. How Private Label is Developed In Store • Benchmark the Brand Leader • Look-a-likes • Category Segmentation • Space Allocation • Selective Listing of Brand Leader SKU’s

  18. Cloning I £1.28 £0.99

  19. Cloning II £1.81 £1.59

More Related