Americans and Private Label

I am getting a little bored with the coverage of the success of private label in the US. No offence to them. I am sure it is big news there.

But the rest of the Western world has been through it. Private label penetration in Europe is almost double that of the US. Retail brands are trusted. Often they are not value options but in the case of Tesco's Finest or Marks and Spencer considered better quality. Partly because retailers have been far more consolidated in those markets and were able to build their brands.

I read today that dollar stores is the one channel in the US that brands are not facing private label competition. Cold comfort really. I recall in the early 1990's before I left the UK you could go slumming and buy national brands at discount grocery stores or you could get quality private label at the national retail chains. Not a great position for brands to be in.

American brands need to face up to a new reality. This will not go away with economic recovery. Why should it? They need to start thinking about their value.

British Retailers - A nation of shopkeepers

Tim Mason, Fresh & Easy's CEO, recently said that Tesco overerstimated the power of retail brands in the US when they launched. "There's less loyalty in the American market. A Brit has to hear it a few times before you accept that people make up their mind where to go each week when they check out the special offers round the kitchen table."

This doesn't surprise me. American retail brands have always been hampered by fragmentation of the market. And by the fact that their owners didn't see them as brands. Hence the surprise at the recent growth of private label brands - a development that is well advanced in Europe - where a store brand is often seen as superior to a national brand.

I have worked for French, British, Canadian and American retailers (including Tesco) and the Brits are always more likely to see their store as a brand and employ brand marketing thinking to promote it. A nation of shopkeepers indeed. Tesco were probably among the most advanced. No surprise that they misread the American market.

Tesco is now backtracking on those statements.