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Coles to Expand Private Label Product Range

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By Published On: November 12, 20190 Comments

Coles has partnered with Sainsbury’s to create more private-label goods. The three-year deal aims to rapidly expand its products within its stores.

“We want to accelerate the introduction of innovative products to Coles Own Brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia,” explained Greg Davis, Coles’ Chief Executive of Commercial and Express.

Private Labels and Its Benefits

The private label products currently account for 30 per cent of its sales. This new venture with the British supermarket aims to increase these sales to 40 per cent. This expansion aims to progress over the next few years. At this current time, the majority of private-label goods from Coles are grown or manufactured in Australia – this is something that won’t change even with the new partnership.

“This deal will free up resources for our own product development team so that they can drive further innovation and help us fulfil our strategy to make Coles an Own Brand Powerhouse,” said Mr Davis.

The products that are included in this private-label venture include packaged food, household goods, beauty and health products. However, there hasn’t been a specific explanation of the products, as Mr Davis ‘doesn’t want to give Woolies a year to get a headstart’.

“Great quality food has been at the heart of our business for 150 years and we’re excited to bring Sainsbury’s fantastic products to Australia, offering Coles customers a range of high quality, innovative products that they won’t be able to find anywhere else,” explained Michael Luck, Sainsbury’s Director of Business Development.

Moreover, this collaboration aims to set Coles apart from its competition, such as Aldi and Woolworths. “A lot of innovation, especially in fast-moving consumer goods, comes from around the world – this is about getting it to Australians faster,” Mr Davis told AFR.

How Do Aussies Feel About Private-Labelling?

While this is nothing new, Australians may feel the need to turn away from private-label goods as they continue to develop. In a study by Canstar, 46 per cent of Aussie consumers believe that private-label products are ‘good’. While this number may seem strong, it comes as a huge drop from its 76 per cent approval rating in 2018.

“The drop comes after three years of encouraging results for the big supermarkets, with 2017 research showing that 77 per cent of shoppers thought private labels were good quality, up from 68 per cent in 2016,” said a spokesperson for Canstar.

Do Customers Favour Simplicity?

According to a new study in the UK, one in eight customers of the supermarket chain, Waitrose, will shop online. The report also found that 61 per cent of shoppers will make at least one purchase online. Moreover, mobile shopping has increased by nine per cent since 2018. The reasons behind this include “a rise in compassion and simplicity in British lifestyles”, said Rob Collins, the MD of Waitrose. According to Mr Collins, 38 per cent have said they’ve become less materialistic over the last decade.

“It seems that, as the world beyond our front doors becomes increasingly complicated, people are doubling down on the things that really matter. Households are decluttering to focus on the values – and people – that mean the most to them,” he explained.

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