There are several factors that have influenced this meteoric rise to fame
- Food & Petrol prices are increasing
- Proliferation of generic brands across new product categories
- Increase in quality of many generic products
- Better in-store promotion
Food & Petrol
The most obvious of which is rising food and petrol prices (and the interrelations therein) forcing consumers to spend their hard earned 'folding stuff' more wisely. This is only going to get worse as petrol is tipped to cross the $2 per litre mark early next year.
Proliferation of generic brands
Woolworths is spreading its' wings wide having released 1154 new products under its I-select brand since May 2005 (Financial Review, 2008). In some instances maybe too wide, like the octopus testicle example above. Much like a soldier firing blindly into the dark, by sheer weight of numbers you would expect some products to be successfully.
Increase in quality
Brand perception has alway hindered the growth of the generic sector, but much like womans rights, there has been a huge amount of progress in a very short period of time. Aldi has shown many retailers the light, proving that quality generics translates into sales at the register.
In-store Promotion
Next time you walk through your local supermarket keep an eye out for attention seeking 'sale' stickers or 'coles bargains'. The big boys have been working hard on gaining more attention and with good reason, they make around 2% extra on their 'home brand' products. Uncle Eddie even argues that advertising spend on name brand advertising has been slashed, opening the door for the home brands to claw a larger foothold.
Josh's Opinion Overall
The David and Goliath 'battle-royal' between generics and the major brands is beginning to go the way of the underdog, despite being bashed over the head with a chair and repeatedly chastised in front of the locals, the slingshot wielding underdog has regrouped, invested in a higher quality weapons stash (probably from his grandfather's arsenal in the USA) and come out all guns blazing. US retail mega-giant or Goliath on Barry Bonds style steroids (if you liked that previous analogy) has seen the light and invested heavily in its own 'home brand' innovation team to maintain their in house products attractiveness, suggesting that home-brand is here to stay.
There is no better time to introduce 'no-frills' products into previously untouchable segments. I agree wholeheartedly that there is nothing to lose from coming out all guns blazing and taking a sink or swim mentality into each separate battle. What is the worst thing that could happen?
--------------You miss 100% of the shots you don't take!----------------
Kelv's Opinion
So what we are really seeing is vertical integration, is it just a matter of time until Coles buy the whole farm? Maybe if they do, they could offer formula one boss Max Mosely a new job, recent video footage suggest he is very handy with a hoe.
If you are interested in this article try reading Room for Home Brand Energy Drinks?
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