Mumbai | Calcutta: consumers are increasingly moving towards private labels at lower prices in supermarkets and department stores since retailers report an increase in sales of their brands or private labels in the face of an demand for submissive consumers.
DMART has seen the sales of Align Align, which makes its private brands, more than double in the last two years to 3,322 RS, while the contribution of the V-Mart brands has also doubled to 64% of all clothing sales in the year 25 from 33% two years ago. Riliance saw twice the arm sales for consumer goods in the quarter which ended in June to 4,400 RS from a year ago, even if only a third of their products is sold in their stores.
“It is very important that not only the private brands are able to fill the spaces available through the gap of national brands, but they also help us to provide higher margins,” Kavindra Mishra, CEO of Shoppers Stop, told investigations, adding that its companies in the private margin represent 18% of its clothing sales and has increased despite the rationalization in the last 18 months. “Private brands must deliver the yield of the gross margin on the movie and profitability, which is super critical.”Most retailers introduce their versions at a reduced price or private labels of series products produced to earn higher margins, but also offers consumers options at lower prices, which helps when budgets for families are crushed in the increase in increasing prices. Riliance Retail, the largest dealer in the country, has escaped his distributor brand activity and acquired several consumer brands to manage them as an entity of rapid movement consumer goods in rapid movement.
“General trade contributes to 70% of sales. While their brands) have a great advantage of being able to sell through our shop or our network of shops, both B2C and B2B, the company has built its own independent distribution network, which is rather substantial,” said Dinesh Tiluja, CFO of Riliance Retail, in a useful post call.
The increase in inflation forced consumers to scrape the expenses and opt for cheaper alternatives and, in some cases, also by brand. In fact, the growth rate of the volume of the 22 listed companies that Kantar followed was only 3.6% in exercise 25, while the products without a brand saw significantly higher growth of 6.1% in the year.
Devaranjan Iyer, CEO of the Lifestyle International Departmental Store Chain, said that the contribution of private labels to total sales is 32% and increasing every year and is growing to a Cagr of almost 15% compared to the low growth to a figure in most of the other categories. “It is not a question of improving profitability but filling the gaps in question. These have a price of money that attracts many consumers who are already stressed in their daily lives,” said Iyer.
A recent EY Consumer Index report has said that Indian consumers are re -evaluating their retail sales choices with over half or 52% of consumers who move on to private labels and 70% of them believe that private labels meet their equally effective needs of branded products. The report states that 69% significant consumers said that stores of shops and private labels help them save. In addition, 74% of consumers have noticed more private label options in which they buy and 70% observed more brand items than the distributor positioned at the eye level on the shop shelves.
“The behavior of consumers has traditionally evolved in response to the change of economic situations, but the current shifts seem to be more permanent. The retailers launch private labels with confidence and charging the space on the privileged shelves …”, said Angshuman Bhattacharya, partner and national leader, consumer products and detail, Ey-Partenon.
