Major Retailers Embrace Private Brands Amidst Inflation: A Shift Towards Affordability

In the midst of inflation, will private brands (PB) become the savior?

Source: Nikkei Nov 15th 2023

Major retailers are expanding their private brand (PB) offerings, particularly in essential items like food. Aeon is revamping half of its private brandTopvalu” food products, excluding fresh items, totaling about 2,500 items, aiming for an over 11% increase in PB sales to over one trillion yen by February 2024. Similarly, Seven & i Holdings plans to double items in its low-priced PB series, “Seven the Price,” by February 2024. Beisia has introduced a new PB, “Beisia Premium,” with plans to switch existing products and expand to over 100 items by February 2024. Seiyu is increasing its fresh food PB, “Shoku no Sachi,” with 65 current items. 

 Supermarket PB market share reached about 17% in October, slowing retail price increases. The main driver of inflation is shifting from goods to services. Generally, PB products are 1-3% cheaper than branded ones, providing higher profit margins. Despite price increases for both, consumers are shifting towards the more affordable PB options.