IBISWorld research has shown it may push groceries to veer away from big brands and instead choose private-label products, according to IBISWorld.
“The move is seen as a way for the supermarket chain to boost the performance of its private-label products, particularly as demand for bottled water is growing strongly at the expense of sugary and sweetener-laden carbonated beverages,” said Nathan Cloutman, IBISWorld senior industry analyst.
Woolies has decided to not stock the newly released Coke No Sugar and several Mount Franklin products. The research agency said these major moves may signify an impact in the FMCG sector, which currently generates more than $105 billion annually and employs more than 330,000 Australians nationwide.
“Private-label products account for approximately 25 per cent of total sales in the supermarkets and grocery stores industry. Woolworths is increasingly looking to expand its private-label product range, including phantom brands. This trend follows a strategy that has been strongly pursued by ALDI, to drive consumers instore through low private-label prices,” added Cloutman
Woolies’ move to promote its private-label products is similar to what is occurring in the UK grocery market, where private-label products are expected to account for 40 per cent of total sales.
“It is expected that Woolworths and Coles will increasingly expand their private-label ranges, to boost their competitiveness against ALDI. Brands, such as Coca-Cola Amatil, are likely to increasingly innovate to keep their products on supermarket shelves. Areas of innovation include expanding the range of premium products and offering healthier alternatives,” said Cloutman.