Woolworths to launch new private label

Date : 29 March 2016

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.