83% of Russians constantly buy goods under own trade marks (OTM) networks, follows from the data of international research company Nielsen provided . 41% of Russian customers take the products under private label at each visit, 22% at every second. A Nielsen study conducted in November of 2015, participated 1,200 respondents in Moscow, St. Petersburg and in seven other cities (through online surveys and personal interviews of company employees). The study also used data of Federal retail audit Nielsen.
Nielsen has not conducted a similar study a year earlier, and therefore has no comparable data on the share of private label buyers by 2014. However, a third of respondents during the November survey 2015 said they began to pay more attention to STM. Most of them explained that the desire to save: the goods under its own trademarks networks cheaper branded goods. For example, the pasta under private label on average two times cheaper than branded counterparts, and traditional dairy products are cheaper by about 20%, leads Nielsen data. In the “Auchan” has calculated that the cost difference between private label products under well-known brands is on average 20-30%. According to Auchan, the largest difference in cost occurs in the categories of chocolate (75%) and bottled water (100%) Also the difference in the retail price depends on product positioning.
Lower cost private label networks compared with products of the major brands is primarily due to the conditions on which producers receive STM ordering from retailers: networks arrange some sort of auction where they offer to release you need to retailer goods for the least cost. Also packaging of products under private label usually looks quite modest, in advertising and promotion of such production networks are invested to a minimum.
The majority of respondents Nielsen noted an increase in the supply of private labels in the stores, and one third reported improvement in the quality of those goods. “Over the past year significantly expanded the range of private brands, — confirms the Director on working with retail chains “Nielsen Russia” Dmitry Shvetsov. — They are available in categories which were not previously present. Traditionally private labels in Russia were launched in the economy segment, but recently the trend of output in medium and high segments”.
In which regions more
Today 41% of sales private label accounts for the Central Federal district, analysts estimated Nielsen. In second place — the Volga Federal district with a share of 18%. The third divide of the North-Western, southern and North-Caucasian Federal district — each is 12%. However, the most dynamically developing private labels in the Volga, Urals and far Eastern Federal districts, said Dmitry Shvetsov. For example, if the October 2014 — September 2015 selling FMCG (FMCG) in the Ural region in comparison to the previous period increased by 10% in monetary terms, the growth in sales of products under private labels amounted to 32%. In the far East region of sale under private labels altogether has grown almost twice — up to 98%. “Growth is driven primarily by the expansion of modern formats of trade in these regions”, says Shvetsov.
The share will grow
The crisis is driving demand for private labels, according to analysts Nielsen’s study, however, the category will continue to grow and after the crisis. 83% of Russians declared that they would continue to buy goods under private labels in the future, when their living standards rise. Interestingly, the share of such respondents was approximately equal in groups with different income levels.
“The Russian market will soon follow in the footsteps of Europe, where private labels are not only present in all price segments, including the premium, but are a truly distinguishing feature, providing retailer customer loyalty. On the Russian market the share of private brands in total sales in monetary terms does not exceed 5%, but from year to year it will increase at double digit rates”, — said Dmitry Shvetsov.
Sales of products under private labels in 2014 was ranked in the turnover of retailers about 10%, and in 2015 has grown considerably, and some networks began to reach 15%, said in the fall of 2015, Andrei Karpov, then held the position of Executive Director of the Association of companies of retail trade.
70% of Russians, according to Sberbank CIB, the crisis shifted to cheaper products
40% of Russians a year ago declared that not ready to buy the goods under own trade marks (OTM) retailers in those product categories is the quality of the product
25% is on average the difference between the value of goods under private label networks and well-known brands
2nd place is the rising price of food in the list of the factors that are most worried about the Russians at the end of 2015
24% reaches the total share of Magnit, X5, Dixy, Lenta and O’key in the turnover of the food market of Russia in the end of 2016
54% of Russians today have enough money only for food
In 40 times increased in real terms sales of shaving products under private label in 2015
47% was the share of own brands retailers in the category of “Nutella” in the middle of 2015
Source: Nielsen, co-head of Rosstat
In addition to the output in the higher price categories, retailers have recently started to build up on the shelves the number of non-food products under private labels. For example, sharply increased sales of private brands in the category aftershaves: their sales in real terms in may—June 2015 compared to the same period last year increased by 4324%, showed data of retail audit Nielsen. However, the share of after-shave products under private labels in the total volume category then still remained negligible — only 0.3%. Much better the position of the STM in complex categories of diapers: during the year, the sales growth of private labels in this category year-on-year 260%, while the share of goods under private labels had already amounted to 7.5%. Food retailers are gradually coming even in such atypical for private label categories, like sporting goods, home goods, children’s toys. For example, in 2014 the “Ribbon” added to the portfolio two new private brands — brand children’s toys and Bigga brand of products for sports and outdoor activities Actico.
Retail chains are gradually able to “teach” the buyer to their own brands, recognizes the Director for external communications “Ashan Russia” Maria Kurnosova: “Consumers have more trust in private label products, which confirms the growth of sales volume,” she says. So, if in 2014 the share of goods under private labels of “Auchan” in the range of $ 16,88%, in 2015 it has increased to 20.4%. And the number of manufactured goods under the private label last year rose by 25% to 2.5 thousand SKUs. The discounters “Dixie” at the end of 2014 the total share of private labels in turnover was 9.8% and by the end of 2015, it has already reached 16%. The total number of items in the range for the year increased by 40%, to 600. “The private label goods the net today fall into the second check every buyers “Dixie”, — said the representative Dixy Catherine Kamanina.
In a network “the Crossroads” (enters in X5 Retail Group), every fourth item sold is the item under STM, said the Director of the marketing Department of a trading network “the Crossroads” Dmitry Medvedev. Right now on the private label brand goods accounted for about 5% of turnover, and this share is planned for the end of the year to increase to 10%. Overall in retail chains X5 Retail Group — “Pyaterochka”, “Perekrestok” and “Carousel” — the products under private labels brought to 14.1% of revenue in 2015.