Coles to cut private label items

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Coles has announced what it calls the biggest overhaul of its private label range since 2007, drastically cutting its number of private label items.

The supermarket giant’s new strategy will see it roll out just one unified brand for all its private label products, removing a number of longstanding labels such as Smart Buy and Simply Less, to be replaced with a simple “Coles” branding.

Like Coles, Woolworths also currently has a multi-tiered private label strategy, with the high quality Gold, mid-tier Select range and lowest priced Homebrand range.

Some commentators claim the move by Coles is a reaction to growing pressure from discount chain ALDI, which only sells a modest range of private label items. ALDI this week confirmed opening dates for its first stores in South Australia, with Western Australia to follow in the coming months,

According to IBISWorld, private label goods currently make up 20 per cent of grocery sales, but that number is expected to increase to around 35 per cent by 2020.

A Canstar Blue study on supermarket shopping habits found that almost one in four consumers have switched supermarkets in the last year, with the majority looking to save money. It also found that 44 per cent of consumers are tending to buy private label products over branded goods, while 59 per cent believe they are often of equal quality.

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