Private labels increase rapidly

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Private labels are turning into a great challenge for the grocery industry in Norway.

Coop and Rema 1000 have the largest share of own brands – and will continue to increase it.

According to figures from research company Nielsen, the growth of the chains’ own brands was 6.7 percent in the first quarter.

“Sales growth for the chain’s own brands is a challenge for the retail industry”, says marketing director Knut Gartland at Nielsen to Dagens Naeringsliv.

“The big brands need to do better with their product development in order to compete”, he adds .

Rema 1000 and Coop have the biggest share of own brands (18.8 and 17.1 percent.) while Norway’s largest grocery chain , Norgesgruppen, crisis-hit Ica and the small challenger Bunnpris are all far behind.

“We are faithful to the food industry and has no ambitions to grow particularly in own brands. But industry should fear Rema and Coop, who focuses more on own brands. ”We want to partner strategically with industry rather than launching its own low-price products”, says ICA’s Director of Communications Bjørn Tackle Friis .

In Sweden and the Baltics though, The ICA Group’s official strategy is to increase the share of own brands. And so have Coop Norway and Rema 1000.

“We have ambitions to be even stronger in own brands, and we see that it contributes to a healthier profitability and better margins in some categories”, says Hege Berg -Knutsen, responsible for Coop’s own brands.

Rema Industries managing director, Martin Klafstad, tells Dagens Naeringsliv that their main target for own brands is where the profitability could be considerably better or where there is a lack of competition.

Supplier Orkla’s communications director, Earl Mageli, is more concerned with the global players Orkla is competing against in Norway than the sales growth of the retail chains’ own brands .

“We do not fear the development. We take the chains’ own brands seriously, they make us sharper. And it is crucial for us to drive product development, otherwise we become uninteresting “ says Mageli.