Woolworths has said it plans to double the number of house brands it sells through its supermarkets, reigniting the longstanding battle between those who favour the cheaper prices that house brands bring and those who feel their range of choice is stifled as supermarkets favour their own products over others. But which house brand goods have the biggest market share?
Whether you call them house brands, store brands or the preferred term in the industry, “private labels”, they make up a large (though not overwhelming) chunk of food sold in Australia. According to the Australian Food and Grocery Council (AFGC), 25 per cent of sales in 2010 were of house brand goods. Back in 2009, that figure was 23 per cent. Back in 2006, it was 18 per cent, and in 2003 it was just 15 per cent. However, the AFGC is predicting that that proportion could rise to as much as 50 per cent.
Lifehacker has always maintained a consistent position around house brands: they can be a great way to save money, but you need to work on a product-by-product basis. Some will be just as good as the pricier alternative: some won’t. There’s no way of knowing short of trying. It’s silly to conclude that they’re all rubbish; a study by Choice last year found that some tasted brilliant, and some didn’t. I came to a similar conclusion during last year’s Mastercheap experiment, where I had just $25 for food for the week. Under those circumstances, buying only house brands saved me a massive amount of money, and didn’t represent a massive gap in quality.
If you don’t like the concept of house brands at all, your choices may be slightly restricted, but not ridiculously so. ALDI, for instance, heavily favours house brands, and only carries non-private-label goods for a handful of categories. Woolworths, Coles and IGA have more options, but have given more space to house brands in recent years. But they obviously recognise the value of existing brands: as we noted recently, in many cases the packaging for house brand goods looks a lot like the branded counterparts, especially for the “premium” house brands (as opposed to the bargain ranges like Home Brand at Woolworths or Smart Buy at Coles). It’s also often the case that house brands are displayed less prominently than the pricier options.
As you’d expect, staples make up a big proportion of what we do buy via house brands. The infographic below (from the AFGC) shows which categories of house brand goods make the most revenue in Australian supermarkets:
The fact that eggs outranks milk is a bit of a surprise. This data does predate the more recent discounting on milk and bread, though since those products are now being sold at lower prices, they wouldn’t necessarily rise in the table (which is based on value sold, not volume). In other categories, I’m surprised the proportion of house brand sales isn’t higher: with sugar, who is ever going to know?
One common argument against house brands is that they disadvantage local suppliers, and that’s an argument that’s going to continue to rage. But when the ACCC investigated the rise of $1 milk, it concluded that those prices were costing Coles and Woolworths rather than farmers. Whether that remains the case over other categories will be something to watch over the next couple of years.
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