Woolworths Australia is dropping its long-standing Homebrand value private
label brand and will rebrand all products under the name Essentials.
Homebrand to be merged into existing Essentials brand
Woolworths introduced Homebrand in 1983 and the range has grown to over 850
SKU's. However, despite work to improve the quality of products in recent years
and also significant packaging redesign, aimed at making the products more
colourful and engaging, the retailer has called time on the brand. Instead the
range will be merged into the Essentials brand which was launched in 2010 and
currently just covers general merchandise categories.
Clear move to improve price and quality perception
The move to launch a new entry tier private label is clearly a strategic
response to two challenges that the retailer faces. Firstly, the need to build a
stronger price proposition in the face of rising competition from the likes of
Coles, Aldi and Metcash, who has also recently re-launched its Black & Gold value
private label brand. Secondly, the growing quality perception amongst shoppers
of Aldi and Coles' private label products. However, a report last year stated
that most Australian shoppers perceive Woolworths and Coles standard tier
private label ranges to be on a par with Aldi's brands, so it will be
interesting to see whether a new entry tier private label will significantly
help improve perception and ultimately performance.