Woolworths scraps private label

Date : 07 June 2016

Woolworths has announced that it will scrap its AU$1bn a year 'Woolworths Select' mid-tier private label in favour of a new brand known simply as 'Woolworths'.

New 'Woolworths' brand to focus primarily on food products

The 'Woolworths Select' brand was launched in 2005 and has grown to a range of over 1,300 SKU's, however Woolworths has taken the decision to rebrand the range as 'Woolworths'. The work is expected to start right away, with the brand being phased out over the next few months. The new range is expected to focus primarily on food, whereas the Woolworths Select range was also available in certain general merchandise categories.

Key strategic move to regain volume growth

This is the second big announcement that Woolworths has made in terms of its private label strategy in recent months. In March the retailer said that it was rebranding its entry tier private label, 'Homebrand' as 'Woolworths Essentials'. The moves tie in with Woolworths CEO, Brad Banducci's plans to improve volumes at the retailer, which has lost share to the likes of Coles and Aldi over the past year.

What do we think?

The step by Woolworths to rebrand and reinvigorate sales via its private label ranges is a positive one, with both Coles and Aldi seeing strong growth of  their own brand products and wholesaler Metcash also doing significant rebranding of its private label ranges. The streamlining of the three core Woolworths brands as; Woolworths Essentials (entry), Woolworths (standard) and Woolworths Gold (premium) should also provide an easier structure for shoppers to understand.

In order to regain growth, the main challenge that Woolworths will have is to convince shoppers that the quality of these products has also improved as part of the relaunch.