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Store Brand Builder™
leveraging European
models of image-driven private label brands to jump-start
premium private label programs in the US by understanding
how to build credible store brands that engender loyalty Our analysis
finds 6 decisive factors
France's Leader
Price offers 2,800 food products and every one is a Leader Price brand. How does this discount food chain meet the challenge
of a private label-only concept?
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| Alan L. Klein. Global Insights Consultant, The Marketing Agency |
The Evolution of Leader
Price
A supermarket in an upscale Paris suburb near Versailles
seems to defy a range of French shopping traditions: Store brand only; a stripped-down ambiance; emphasis on deep discounts.
You even supply your own bags to check out.
In this neighborhood,
it seems distinctly out of place. Yet sales in this Leader Price supermarket are booming, and it is evolving as a regular
food store for all shoppers, at all income levels.
This is not
a single store phenomenon. Leader Price is rocking the retail food industry across France and challenging the dominance of
the hypermarkets, including global powerhouse, Carrefour. (Leader Price is a division of Group Rallye's Casino division; its
performance is leading the growth of this chain.)
The Key Difference: 100% Store Brand
Leader Price is one of a number of "deep discounters" in France
(Germany's Lidl was 1st.
But Leader Price is distinct from other discounters by exclusively offering an extensive assortment of its
own brands. With few exceptions (beer & wine), every one of over 2,800 food products, from dairy & coffee to pet foods
& snack foods; from cookies & chocolate to cereals & prepared meals; frozen and shelf-stable . . . everything
at Leader Price is a Leader Price brand.
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Overcoming the Credibility
Gap
The combination of exclusively store brand and deep discounting
implies a risk of credibility for a retailer: Consumers may assume substantially lower quality compared to national brands.
Even in Europe, where
store brands have higher acceptance than in the US, there may be constraints on how far a retailer can limit consumer selections. Leader Price undoubtedly faced this problem in its early days: A clientele
limited to pure discount shoppers who were focused on price, or who would purchase only commodity products.
But today, with an apparent success underway, Leader Price is reaching a broader
base of consumers across an extensive food product assortment. |
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An Astute Packaging Strategy
When seen side-by-side, these 2 yogurts have similarities but are clearly
different brands.
But when the Leader Price package is seen without
the national brand present, we think the graphic elements & use of color evoke the national brand. It's a perceptual effect
that lets Leader Price give its products a national brand image.
The
Leader Price logotype is always small, subordinate, almost a seal of approval, and not a distraction from other primary package
graphics.
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 6 Decisive Factors of Success
for Leader Price
The significance of Leader Price's progress goes
beyond discounting in a tight economy: It is the degree to which consumers will accept the concept of an exclusive store brand,
especially in a country which prides itself on a history of culinary seriousness.
Our Think Conceptually analysis suggest there are 6 factors that underpin Leader Price's success.
Among consumers:
1. Confidence in the overall integrity of the chain;
that the management is committed to serving the community with high quality foods at lower prices while giving smaller producers
a chance to compete.
2.
Perception that the store brands are really the same quality as the more expensive national brands.
3. Belief that lower prices are
the result of astute chain purchasing policies and reduced overhead; not a function of inferior quality or compromises.
Within the stores:
4. An extensive range of products (2800+) that covers
most or all needs of consumers for foods, so that Leader Price becomes the store for daily shopping, not just for selected
items
. . . in some stores, shoppers are welcomed with the fragrance
of fresh baked baguettes & breads.
5. Packaging that reinforces the imagery of the Leader Price products
. . . inspired by familiar national brands (but without being direct copies)
the Leader Price logotype as a subordinate package design element
6. Consistently lower prices
(averagely 30% below the national brands on all products), with the absence of sales, promotions and loyalty programs (which
Leader Price describes as misleading)
. . . this is the ultimate
expression of "Everyday Low Price"
 If you are a retailer
planning to develop or improve store brands - let's discuss how we can leverage think conceptually research
to create store brands that can increase sales and profits as well as build shopper loyalty.
Call
Alan Klein at 212 729 6064 or . . .
Send an e-mail by clicking here.
think conceptually © 2010 The Marketing Agency Paris
New York, LLC
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