1. Private Label Report Purpose of the Report
Publication date:
December 2018
Next publication:
June 2019
Purpose of the Report
To clarify the role of private label in Makro
Private Label Report

2. Private Label What is Private Label?
Private Brand
House Brand
Dealer-Own-Brand
Confined Label
Exclusive Brand
Private Label
What is Private Label?
There is often confusion around the difference between private label, private brand, house brand, dealer-own-brand, confined label, and exclusive brand. These terms are often used interchangeably and sometimes incorrectly. As such, please refer to the below definitions for clarity, the term private label encompasses both. For the purpose of this report, focus remains purely on private brand
Private brand, House brand and Dealer Own brand:
A brand of product(s) that is exclusively manufactured by a contract or third-party manufacturer for a retailer, according to retailer specifications, and sold under a retailer’s brand name. Private brand is often tiered according to ‘good, better, best’ brand positioning, however these tiers are defined differently across retailers i.e. some might refer to premium / national brand equivalent / value or fit for purpose
Globally, certain retailers (i.e. Lidl) are moving towards vertical integration with their private brand products (i.e. owning the factories which private brands are manufactured in)
Confined Label, Exclusive Brand:
A brand of product(s) owned by a manufacturer or producer but exclusive rights are given to a retailer to be the sole distributor of the product to the market
Let’s take you on a journey down the shopping aisles of Makro, showcasing their most prominent private brand products
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3. Private Label Role of private label in Makro Strategy
Private label brand excellence remains a key focus for Massmart
Makro are committed to keeping the customer at the centre of its private label decisions
Makro intends to keep private label true to its positioning of ‘more for less’, ‘big on quality, big on value’, inter alia, and ultimately, saving customers money so they can live better and trade more profitably
Strategy
To invest in new product development and innovation, focusing on KVI lines, to drive sales growth and category leadership
To collaborate seasonal deals to secure reduced cost prices and increased volumes
To focus on ensuring all private label suppliers implement and comply to the Global Food Safety Initiative (GFSI) standards i.e. responsible private label sourcing
To focus on developing private label packaging that is readily recyclable and resource efficient – conduct regular packaging audits
To expand the skills and experience our private label team
Financials and/or Contribution
At Group level, private label contributes 9.2% (2017: 9.0%) to total sales (FY2018 Analyst Presentation)
Food Private label brands – 73 brands in portfolio (2017: 15), with sales penetration of 5.6% (2017: 5.9%)
“Private label underpins a retailer’s tactical position. We have some great brands that continue to do well for us.” Guy Hayward Massmart CEO
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4. Private Label What are the Private Brands in Makro? Private brands
First Value
M Brand
Aro
Shopper Profile
LSM 2 - 8
LSM
Strategic Brand Positioning
Good (Value)
Reliable, no-frills budget basics
Strong commodity focus for commercial customer, usually promoted in case lots
Better (Standard)
Flagship private label brand
Designed to improve overall retail customer penetration
Reliable, no-frills budget items
Offering commercial customers a strong value alternative
Price Positioning
Price Fighter
Value for money
SKUs
Participates in all basic commodity categories across groceries / household
Fresh Butchery, Eggs
Frozen ready meals, veg and seafood
Groceries e.g. UHT milk, tinned food, spices, sauces, snacks incl. Biltong
Household products
Personal care products,
Baby products
Larger pack sizes for catering & foodservice industry
Products available cross catering, stationery, paper/filing, household, spreads/condiments, meals/canned goods, snacks/sweets/biscuits
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5. Private Label What are the Walmart Shared Private Brands in Makro?
Marketside
Equate
Ol’Roy
Shopper Profile
LSM
Strategic Brand Positioning
Better (Standard)
Highly competitive portfolio bringing a wider variety of products that are affordable and innovative
A means to easy range extension and aggressive new product development
Price Positioning
Value for money
Range
Fresh produce
Bakery
Butchery (concessionary model under Massfresh)
Health & Beauty (body care and bath toiletries)
Pet Treats
Dry Dog Food
Dog Accessories
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6. Walmart Shared Private Brands:
Private Label
Strategic Brand Positioning | Good (Value) and Better (Standard)
Private Brands:
M Brand - Better (Standard)
Aro,,First Value - Good (Value)
Makro offers a wide private label product range and pricing mix, servicing a broad customer base across the LSM spectrum
Walmart Shared Private Brands:
Marketside, Equate, Ol’Roy – Better (Standard)
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7. Private Label
Price Positioning | Good (Value) vs. Market Leader
Makro intends to keep private brands true to the Makro positioning of more for less, big on quality, big on value, inter alia, and ultimately, saving customers money so they can live better and trade more profitably
Good (Value)
Market leader
A large investment has been made to establish the Checkers housebrand as a guaranteed quality product at an affordable price, receiving prominent position throughout the store and strong focus on leaflets. Checkers also carries an extensive range of exclusive brands visible throughout the store. The following only focus on the Checkers private brand.
R10.95
Note: pricing as at
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8. Private Label Social Media
What media platforms are used to communicate Makro Private Brands
Print
Website
Makro private brand enjoys prominence in national and regional broadsheets
Private brands feature within digital broadsheets, or can be looked for using the ‘search’ button
m Brand seasoning
Ol’Roy
Social Media
Facebook and Twitter showcasing Makro private brand
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9. Private Label What’s going on in-store?
Makro private label has significant presence on shelf, across categories
‘Fast fact’ signage advertises the presence of ‘HOUSE BRANDS IN DA HOUSE’, in new generation Makro stores
Makro – Riversands JHB
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10. What’s going on in-store?
Private Label
What’s going on in-store?
Great presence on shelf – Makro private brand, Aro, surrounds a competitor on shelf
The m Brand is featured to the right of the number one branded product in the category
When all Makro private brands are on shelf, they are brand blocked to create impact
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11. Maryla Masojada | Lead Analyst Adrienne Osberg | Retail Analyst