Private Labels are taking the world by storm and are also flooding the Indian markets. This article traces the origin and evolution of the retail industry along with private labels in Europe and North America, and ends with a note on the evolution of private labels in India.
The emergence of retailing in India in an organized format has made private labels familiar among Indians. Go to Shoppers' Stop outlet and you will find a brand called `STOP' which is Shoppers' Stop's own brand. Similar is the case of the `Westside' brand of Westside from the house of Tatas. In Pantaloons' food retail outlet, `Food Baazar' and the RPG counterpart, `FoodWorld,' one can find packets of groceries marked with a `Food Bazaar' or a `FoodWorld' stamp. So what is a Private Label? According to research scholar, Baltas (1997), a private label is: "a consumer product produced by, or on behalf of, retailers and sold under the retailers' own name or trademark through their own outlets" The history of private labels is intertwined with the history of the retail industry and goes as far back as 1869, when `Sainsbury's', the father of modern supermarkets was established in Victorian England. Shops in the 19th century England were very different from what it is today. The product lines offered were very narrow, and were clearly divided into distinct categories such as: grocers, dairies, butchers, greengrocers, etc. In such a backdrop, John James Sainsbury and his wife Mary Ann founded `J Sainsbury,' which primarily started out as a dairy.
When European retailers were popularizing private labels, American retailers were a little late to react. Though the origin of retailers like Loblaw and Kmart could be traced back to the early 1900s, the organized retail format came into being in the mid-1900s. Loblaws, Canada's largest food retailer had a strategy of extended own brands where different variants were targeted towards different market segments. The `No-Name' brand was lower priced for the price sensitive consumers, whereas the `Presidents Choice' was the value- added, high priced, premium private label. |
