One of the most frequently expressed concerns about supermarket house brands is that they will squeeze out rival products. If that bothers you, you won’t like this: Woolworths is planning to expand its range of house brands even more — including more products at the pricier end of the market.
Woolworths today announced a new three-year strategy for its supermarkets, as part of a broader revamp which the parent company has branded “Lean Retail”. Changes will include more ready-to-heat meals in store and further price reductions. One temporary change will be adding “an extra half-day of stock levels” across all stores to ensure that popular brands don’t run short.
However, the thing that really jumped out at us was the plan to expand house brands. Woolworths openly acknowledges this is driven by the growing popularity of ALDI, which largely relies on its own brands and which is expanding rapidly.
Here’s what Woolworths had to say:
A new pricing and value strategy will be implemented to neutralise Coles and contain Aldi’s impact on our sales, with measures including lower pricing, better ranging, targeted customer offers using a revised and improved loyalty system, and a detailed strategy for improving Own Brands. Own Brands will play a key role in competing with limited range discounters. Woolworths will create higher quality and better priced Own Brands to close range gaps where no branded alternative exists.
That suggests that Woolworths isn’t planning to add more Home Brand goods in its discount house brand range — an area where all supermarkets tend to closely match prices. Instead, it wants to focus on its Select brand goods.
Our general stance on house brand goods is that it’s always worth trying them — if they’re cheaper and just as good, why pay more just for the label? But some consumers automatically oppose them, or refuse to buy them unless they’re made in Australia. What’s your take? Would Woolworths increasing its house brand range make you switch from Aldi? Tell us in the comments.