1. November 2013 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
November 2013
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
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 Shoprite, showcasing their most prominent private brand products

3. Private Label Role in Shoprite Strategy Financials and/or Contribution
A means to provide relevant and better value products for its shoppers
Shoprite Private Brand, 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
Strategy
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
The focus is not only on key commodity price points, but also on upmarket products aligned to the Group focus of targeting LSM8-10
To provide the opportunity to deleverage power from multi-national suppliers
Financials and/or Contribution
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
“Continued improvement in our private label offering enabled us to bring better value to customers, reflected in private label participation of turnover increasing a further percentage point with a profitable increase of more than R300m.” Pieter Engelbrecht, Shoprite Group CEO

4. What are the Private Brands in Shoprite?
Private Label
What are the Private Brands in Shoprite?
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
Shopper Profile
LSM 4 – 7
Strategic Brand Positioning
Good (Value)
Just like the best for less’
Ritebrand makes R10 go further - consistent quality at the lowest possible price
Price Positioning
Price fighting brand - to keep brand leader’s pricing in check
Cheapest on shelf in high volume, low margin categories, communicating a price advantage which reinforces the ‘low price promise’ positioning of Shoprite
SKUs
Participates in basic commodity categories, as well as receiving prominent position across a spectrum of household categories(incl. baby and pet food), food categories (incl. perishables e.g. frozen vegetables)

5. Strategic Brand Positioning | Good (Value)
Private Label
Strategic Brand Positioning | Good (Value)
RiteBrand aims to be the cheapest product on shelf without compromising on quality – ‘Just like the best for less’
Ritebrand lowest price on shelf reflects Shoprite’s low price positioning

6. Price Positioning | Good (Value) vs. Market Leader
Private Label
Price Positioning | Good (Value) vs. Market Leader
Ritebrand strives for price leadership on shelf without compromising on quality, while supporting the Groups ‘low price promise’ positioning
Good (Value)
Market leader
R9.99

7. What media platforms are used to communicate Shoprite Private Brand
Private Label
What media platforms are used to communicate Shoprite Private Brand
Print
Website
Shoprite private brand enjoys prominence in stand alone private label leaflets, as well as within national and regional broadsheets
In the ‘specials’ section private brand promotional products feature within electronic broadsheets, or can be looked for using the ‘search’ button
Social Media
Direct Mail
Facebook and Twitter showcasing Shoprite private brand
Promotional ers, with the latest updates and great specials – private brand included

8. What’s going on in-store?
Private Label
What’s going on in-store?
Ritebrand has significant presence in-store (POS) and on shelf (variety of products across basic commodity categories)
Merchandised next to the brand leader
PnP Fields Centre - Kloof

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