Big brands worried about big business

So some big brands are concerned that the supermarket giants might be harmful for their commercial health. Or so Lara Sinclair says in her story, Brands in secret war on chains, in The Australian yesterday. The report claims some major brands are getting together to combat the growth in house brands by Coles and Woolworths. They are looking for other ways to get their brands in front of consumers. This report in The Australian is interesting because of the battle between big brands and the two giants and also because of the opportunity for independent retailers who usually like dealing with brands.

“The move is the first sign of a coherent fight back from packaged goods companies faced with moves by Woolworths and Coles to reduce the number of brands they carry to make room for new, premium-priced, house-brand product ranges.

In some packaged goods categories, only the top one or two brands will survive the cull. Companies are expecting to increase spending on media advertising or co-operative marketing budgets spent with the retailer – such as catalogues and in-store promotions – to keep their brands on shelves.”

Independent retailers like brands because the brands themselves carry consumer awareness which the independent stores themselves cannot easily create. Maybe these major brands would do well to support the independent sector and in return independents could find more creative ways of supporting the major brands which support them.

On the one hand the Coles and Woolworths retail giants offer buying power and logistics benefits. On the other hand, though, they create a risk of taking your market with a house brand product along with the cost of discounts and rebates of a level beyond what the independents pursue.

Smarter use of technology by independents can help them present a better value proposition to national brands.

Also, the concern of the big brands is an opportunity for some independent channel to consider moving outside their traditional categories to provide a home for the brands.

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