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Sunday, October 25, 2020

Rise in Private Brands of large-chain Retailers

Since the lockdown, there has been a rise in the private brands of large chain retailers as the chains have a better control over the supply chains of their own products than that of the FMCG companies. Future Group, Spencer’s Retail and Metro Cash and Carry have seen more than 50% growth in their in-house brands of essential products like handwashes, flour, noodles, spices and lentils. At the same time, large FMCG brands took a hit due to reduction in production at manufacturing plants and then poor distribution due to lack of workers.

Devendra Chawla, CEO of Spencer’s Retail and Nature’s Basket said that their personal brand vendors are spread out geographically and during on-boarding, their factory and distance to main distribution centres are worked out.

Chawla added that as compared to February this year, the company’s breakfast cereals, pasta, hakka noodles, wafer biscuits, tea and floor clean categories grew more than 50% during mid-March to April. Consumers try out these products due to the lack of availability of regular brands. The savings on this is around 15-20% and if the saving mindset prevails then these brands will get an opportunity to grow.

Arvind Mediratta, CEO of Metro Cash & Carry India informed that April was a record month for the company’s private brands. Their own hot beverages grew at 46% compared to the segment growth of 34%, confectionery at 57% compared to 45%, and groceries and processed foods at 70% compared to 48% for the overall category.

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Aro and Rioba, Metro Cash and Carry owned brands in categories like noodles, snacks, spices, dishwashing products, handwash, hand sanitisers and surface cleaners also grew rapidly. While lentils grew 30% compared to February, it has now dropped to 15-20% because most customers have stocked up on it.

The retailers sent their own trucks to ensure better availability of their in-house brands, while many national FMCG brands had their clearing freight agents and depots shut in the early weeks of the lockdown. Future Group said that in the current scenario, customers are not choosing a brand but buying a product which they need. There has seen better growth across hand wash and house cleaning products, biscuits, namkeens, pasta and pulses. Chawla affirmed that they managed availability of products well as their vendors produced only for them.

SourceET Retail
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