UK Own Brands

UK Own Brands

This report covers the UK market for own-brand products. In particular, it focuses on own brands in the following sectors: groceries; over-the-counter (OTC) medicines; do-it-yourself (DIY) products; and clothing and footwear.

Key Note estimates that the total value of own-brand sales in 2005 was £69.1bn at retail selling prices. Sales have increased by a total of 17.3% since 2001. In addition to a general rise in UK retail sales, the growth in this market reflects the increasing range of own-brand products available. Growth rates accelerated between 2001 and 2005, as own-brand products expanded their presence across markets — moving from their original status as low-priced, value-for-money items into the premium and lifestyle arenas. R etailers are focusing on developing premium food products that directly address consumer concerns about the provenance of the food that they eat, as well as responding to growing consumer interest in healthy eating.

The grocery market is the largest sector of the own-brands market, and is primarily composed of three major segments: foodstuffs; beverages; and household goods. The UK's major supermarkets, along with a number of major private-label retailers, supply a wide range of food, beverages and additional non-food own-brand items.

The rise of own-label products — one of the most striking retail success stories of the last decade — is also being seen in many other sectors. In clothing, for example, flagship own-label brands such as ASDA's George clothing and Tesco's Value range are having a dramatic effect, with the two supermarket giants emerging among the top three clothing retailers in the country (from virtually a standing start a decade ago).

T he increasingly concentrated nature of the retail market is one of the main factors supporting the rise of own-label products. Retailers have growing bargaining power as the market becomes more concentrated, and have the confidence to invest in establishing their own brands (which offer greater margins than can be obtained from selling non-retailer brands). The growth of high-quality own brands, such as Tesco's Finest and Sainsbury's Taste the Difference, is likely to further increase pressure on suppliers of non-retailer-branded goods.

The outlook for own brands appears bright. Sales are likely to expand at well above the rate of inflation over the next 5 years, driven by factors such as the growing penetration of supermarkets into non-food sectors (including clothing, electronics, health and beauty and OTC medicines). Meanwhile, the range of own-brand goods available in DIY outlets is also likely to expand, as firms such as B&Q devote ever-increasing shelf space to own brands in the pursuit of profits growth. The increasing acceptance among consumers of own brands also suggests that the drive of private-label products into premium and lifestyle sectors of the grocery market will continue.

This report covers the UK market for own-brand products. In particular, it focuses on own brands in the following sectors: groceries; over-the-counter (OTC) medicines; do-it-yourself (DIY) products; and clothing and footwear.

Key Note estimates that the total value of own-brand sales in 2005 was £69.1bn at retail selling prices. Sales have increased by a total of 17.3% since 2001. In addition to a general rise in UK retail sales, the growth in this market reflects the increasing range of own-brand products available. Growth rates accelerated between 2001 and 2005, as own-brand products expanded their presence across markets — moving from their original status as low-priced, value-for-money items into the premium and lifestyle arenas. R etailers are focusing on developing premium food products that directly address consumer concerns about the provenance of the food that they eat, as well as responding to growing consumer interest in healthy eating.

The grocery market is the largest sector of the own-brands market, and is primarily composed of three major segments: foodstuffs; beverages; and household goods. The UK's major supermarkets, along with a number of major private-label retailers, supply a wide range of food, beverages and additional non-food own-brand items.

The rise of own-label products — one of the most striking retail success stories of the last decade — is also being seen in many other sectors. In clothing, for example, flagship own-label brands such as ASDA's George clothing and Tesco's Value range are having a dramatic effect, with the two supermarket giants emerging among the top three clothing retailers in the country (from virtually a standing start a decade ago).

T he increasingly concentrated nature of the retail market is one of the main factors supporting the rise of own-label products. Retailers have growing bargaining power as the market becomes more concentrated, and have the confidence to invest in establishing their own brands (which offer greater margins than can be obtained from selling non-retailer brands). The growth of high-quality own brands, such as Tesco's Finest and Sainsbury's Taste the Difference, is likely to further increase pressure on suppliers of non-retailer-branded goods.

The outlook for own brands appears bright. Sales are likely to expand at well above the rate of inflation over the next 5 years, driven by factors such as the growing penetration of supermarkets into non-food sectors (including clothing, electronics, health and beauty and OTC medicines). Meanwhile, the range of own-brand goods available in DIY outlets is also likely to expand, as firms such as B&Q devote ever-increasing shelf space to own brands in the pursuit of profits growth. The increasing acceptance among consumers of own brands also suggests that the drive of private-label products into premium and lifestyle sectors of the grocery market will continue.