Lockdown: Retailers witness spike in sale of private labels

PTI, Apr 26, 2020, 7:10 PM IST

New Delhi: Leading retailers Future Retail, Walmart and Metro Cash & Carry have witnessed a spike in their private labels as supply lines from other manufacturers are disrupted amid the lockdown.

The retailers said their in-house brands in essential categories such as staples and food have witnessed over two-fold jump in sales during the period of lockdown.

The retailers have pushed their private labels to fill the gaps in the supply chain due to production shortage and transportation from other manufacturers, and even introduced new products under their private labels during the crisis.

Encouraged by the customers’ response, retailers are also now extending their private labels in categories such as packed foods and beverages, a segment which is largely dominated by the leading FMCG companies.

“Our private label brands have witnessed encouraging growth in the past few weeks and yes we have been able to cater to our customer needs through our own brands. In our own brands, we have the flexibility to launch products and packs based on our target groups,” MetroCash & Carry India MD & CEO Arvind Mediratta said.

It has ramped up capacities in almost all essentials categories ranging from – pulses, flours, rice, oil amongst others, besides other key categories in personal and home care products such as hand wash, sanitizers, and cleaners to ensure availability of stocks at its stores during the lockdown.

“Own brands under categories such as personal care, FMCG processed food, snacking, tea are growing over 100 per cent and grocery like rice, flour, oil over 150 per cent. Furthermore, we have seen our own brands gaining a share by almost over 1 per cent,” he added.

According to Future Retail, which runs retail brands like Big Bazar and EasyDay, it has also witnessed a “significant increase” in sales volume of private labels at its stores after the lockdown.

“We have witnessed this trend in segments such as – staples, grains, snacking and spices,” a Future group official said, adding “there is a significant increase in that”.

On being asked whether the company expects this trend to continue post-lockdown, he said it can not be ascertained at this stage but definitely consumers have got a taste of their private labels and may figure in their future shopping list.

Walmart India also pushed its private labels and introduced hand sanitisers under its private label brand Great Value Hand Rub Aqua swiftly to meet the demand for hygiene products, which spiked during the lockdown.

“We have ramped up several categories across our private brands to fill any gaps in supply chain arising due to production shortages from manufacturers or transportation of the products to our locations.

“In order to ensure that our members can seamlessly procure essential items across categories, we have also ramped up new product development in our private brands segment and fast-tracked commercialisation of products such as sanitisers, liquid washes and bulk packs of staples,” said Walmart India Spokesperson.

Besides, Walmart is now ready with new offerings in fruit-based beverages this summer as consumer appetite shifts more towards that. It has introduced a fizzy apple drink under its Great Value brand in a 160-ml pack, priced at Rs 10.

“Both the pack size and the flavour have been launched for the first time and we plan to introduce more size variants in the coming weeks. There are other new exciting products in our pipeline which will be launched in the upcoming season,” said Walmart India.

While Metro, which is seeing a good growth in tea, is supporting its vendor partners of its private labels in getting permission to open up their facilities to manufacture and move goods to the stores across 11 states where its stores are present.

“In some instances where vendors are unable to organise transportation, Metro has supported them with moving stocks from their warehouses. We work with multiple vendors across locations and these vendors are based in & around Tier 1 cities or metros which has been advantageous, unlike most big FMCG companies who have manufacturing units in locations like Baddi, Goa, Guwahati which have had huge concerns due to transportation restrictions, labour issues etc,” Metro Cash & Carry India MD and CEO Arvind Mediratta.

According to the company, its understanding and experience coupled with learnings from its German counterparts helped it to prepare for the lockdown “adequately.”

“We proactively implemented strategies to warrant there is enough stock to fulfill daily essential needs of our customers. Right from the first phase of the lockdown till today, we are closely working with our supplier partners to ease out delivery ensuring stock availability at all our stores,” Mediratta added.

India is currently going through an extended lockdown by the government to curb the spread of the pandemic.