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Woolworths shelves Homebrand label, replaces with Essentials

woolworthsWoolworths will phase out its 33-year-old Homebrand label, to be replaced by the less well-known Essentials brand.

The supermarket giant will ditch the red and white Homebrand label, launched in 1983, after spending months narrowing the price gap with discount retailer Aldi. Woolworths continues to review the entire suite of private labels, including Select and Macro.

“Part of this review will see our current value ranges, Homebrand and Essentials, consolidated into one improved value range called Essentials,” Woolworths said.

“The Essentials range, as the name suggests, are products every home needs, both food and non-food.”

The name change will affect hundreds of products, ranging from meat pies to fly spray.

Morningstar analyst Daniel Mueller said Woolworths may be trying to tackle perception troubles around the price and quality of the brand.

“The brand was a little bit tarnished in that they were more expensive than Aldi and at times more expensive than Coles last year,” he said.

Mueller said Aldi had achieved a strong reputation for reasonable quality products at low prices.

Australian Retailers Association executive director Russell Zimmerman said Woolworths’ review would be likely to involve changes beyond branding to include product range and quality.

“If the quality is going to be there then the consumer is going to buy it,” Zimmerman said.

Woolworths has spent more than $350 million so far on lowering food prices in a bid to narrow the price gap with Aldi and Coles.

The retail giant, which posted a first-half loss of $972.7 million last month due to its failed Masters hardware business, said customers can be assured that the Essentials brand will offer market-leading value.

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