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

2. Private Label What is Private Label? | 2018
Private Brand
House Brand
Dealer-Own-Brand
Confined Label
Exclusive Brand
Private Label
What is Private Label? | 2018
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
NEED TO KNOW MORE
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 Usave, showcasing their most prominent private brand products

3. Private Label Role in Usave Strategy of private label
A means to provide relevant and better value products for its shoppers
A sizeable portion of Shoprite Private Brand, Ritebrand, together with U Brand (launched Nov 2017), is stocked on shelf
Ritebrand, strives for price leadership on shelf without compromising on quality, while supporting the Groups ‘low price promise’ positioning
Ritebrand offers a guaranteed ‘refund or replace’ promise
U Brand plays a similar role as Ritebrand, and will replace this offering in all Usave stores (normal and container)
USP(unique selling point) is the enhanced visual packaging (competing with brand leaders), while delivering on price, quality and value
Strategy of private label
To continue to innovate, develop and extend the range offering (both for key commodity price points and upmarket products), while delivering better margins for the Group
Targeting over 300 products with a simple proposition of comparable quality to the national brand leader, at a reduced price
To provide the opportunity to deleverage power from multi-national suppliers
Financials or Contribution of private label in Shoprite Group
Shoprite’s private label categories have reportedly outgrown store growth threefold, with SA contribution increasing from % in FY2017 to 16.2% in FY2018, showing a profitable increase of +R300m (SA Retail sector share 21.1% - Source: Nielsen)
20 of its private brands now worth +R100m
Usave is the Shoprite Group’s youngest supermarket chain and focuses on the needs of lower income customers.
Usave has a simple philosophy: “When we save, Usave”. The brand removes the cost of packaging and regular store frills and trimmings out of the value chain and passes this saving on to the customer.
“Where good food costs less Everyday!”
“No one is cheaper! Based on an independent audit of 100 of SA’s Favourite Products”
*CHEAPEST ON 100 OF SOUTH AFRICA’S FAVOURITE PRODUCTS. REPRESENTATION OF AN INDEPENDENT AUDIT COMPARING AVERAGE PRICES OF 100 PRODUCTS OVER A 3 MONTH PERIOD
This gives customers the price advantage associated with bulk buying, without the need to buy in bulk.
Usave is an ideal vehicle for the Shoprite Group’s expansion plans into Africa and it also allows for greater penetration into underserved areas of the market within South Africa.
While most Usave stores follow a smaller format, some larger Usave super stores have been successfully opened in selected locations. These stores stock a broader range of products, along with a bakery and butchery. Money Market counters also provide much-needed access to a number of financial services such as money transfers, utility payments and bus ticket purchases.
U$ave is their no-frills discounter brand with 348 stores that carry their own dedicated private label range of products alongside brand leaders.

4. What are the Private Brands in Usave?
Private Label
What are the Private Brands in Usave?
Private brand is often tiered according to ‘good, better, best’ brand positioning, defined differently across retailers
The tiered approach enables the retailer to control the price perception of its products
Private brands
Ritebrand
U Brand
Shopper Profile
LSM 4 – 7
LSM 1 – 5
Strategic Brand Positioning
Good (Value)
Just like the best for less’
Ritebrand makes R10 go further - consistent quality at the lowest possible price
No-frills range, with enhanced visual packaging
Positioned against national branded products, with comparable quality
Price Positioning
Price fighting brand
Cheapest on shelf in high volume, low margin categories, communicating a price advantage which reinforces the ‘low price promise’ positioning of Shoprite
Just savings – delivering on consistent pricing and value
SKUs
Participates in basic commodity items across grocery, non-food and perishable categories
Participates in basic grocery, perishables and personal care categories, at this stage

5. Strategic Brand Positioning | Good (Value)
Private Label
Strategic Brand Positioning | Good (Value)
Ritebrand and U Brand aim to be the cheapest product on shelf without compromising on quality
Ritebrand and U Brand lowest prices on shelf, reflecting Shoprite’s low price positioning

6. Price Positioning | Good (Value) vs. Market Leader
Private Label
Price Positioning | Good (Value) vs. Market Leader
Ritebrand and U Brand strive for price leadership on shelf without compromising on quality, while supporting the Groups ‘low price promise’ positioning
Good (Value)
Market leader
Note: pricing as at
R9.99

7. What media platforms are used to communicate Usave Private Brand
Private Label
What media platforms are used to communicate Usave Private Brand
Print
Website
U Brand is advertised in broadsheets found in both local newspapers e.g. Isolezwe, and in-store
In the ‘specials’ section private brand promotional products feature within electronic broadsheets
Direct Mail
Usave broadsheets are placed in consumers mail boxes, as a ‘Knock and Drop’ (Private brand featuring)

8. What’s going on in-store?
Private Label
What’s going on in-store?
Ritebrand and U Brand have significant presence in-store (POS) and on shelf (limited products across categories)
Merchandised next to the brand leader
Private brand and two national brands carried
Branding & pricing clear and prominent
Wire baskets holding product in place
Packaging with enhanced visual appeal
Dumpbins in strategic places

9. Maryla Masojada | Lead Analyst Adrienne Osberg | Retail Analyst