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Own Brands

Published by: Key Note Publications Ltd

Published: Oct. 1, 2007 - 177 Pages


Table of Contents


Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Groceries

Clothing and Footwear

DIY Products

Cosmetics and Toiletries

OTC Medicines

MARKET TRENDS

Own-Brand Products Become More Responsive to Changing Consumer Needs

The Rise of Own-Brand Clothing and the Fast-Fashion Phenomenon

Price Cuts Drive UK Retail Sales

Housing Market Gloom Weakens the DIY Market

Faith in Private-Label Personal Care Grows

ECONOMIC TRENDS

Inflation

Table 1: UK Rate of Inflation (%), 2002-2006

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2002-2006

Household Disposable Income

Table 3: UK Household Disposable Income Per Capita (£), 2002-2006

Population

Table 4: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006

Unemployment

Table 5: Actual Number of Unemployed Persons in the UK (million), 2002-2006

MARKET POSITION

The UK

Table 6: Own-Brand Retail Sales as a Proportion of Total Retail Sales in the UK by Value at Current Prices (£m and %), 2002-2006

Table 7: Breakdown of All Retail Sales and Own-Brand Retail Sales in the UK by Sector by Value at Current Prices (%), 2002-2006

Overseas

2. Market Size

THE TOTAL MARKET

Table 8: The Total UK Market for Own-Brand Products by Value at Current Prices (£m at rsp), 2002-2006

Figure 1: The Total UK Market for Own-Brand Products by Value at Current Prices (£m at rsp), 2002-2006

BY MARKET SECTOR

Groceries

Table 9: Own-Brand Sales in the UK Grocery Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Table 10: The UK Own-Brand Grocery Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Clothing and Footwear

Table 11: Own-Brand Sales in the UK Clothing and Footwear Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Table 12: The UK Own-Brand Clothing and Footwear Sector by Value at Current Prices (£m at rsp and %), 2002-2006

DIY Products

Table 13: Own-Brand Sales in the UK DIY Products Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Table 14: The UK Own-Brand DIY Products Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Cosmetics and Toiletries

Table 15: Own-Brand Sales in the UK Cosmetics and Toiletries Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Table 16: The UK Own-Brand Cosmetics and Toiletries Sector by Value at Current Prices (£m at rsp and %), 2002-2006

OTC Medicines

Table 17: Own-Brand Sales in the UK OTC Medicines Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Table 18: The UK Own-Brands OTC Medicines Sector by Value at Current Prices (£m at rsp and %), 2002-2006

Other Own Brand Sectors

OVERSEAS TRADE

Food, Beverages and Tobacco

Table 19: UK Overseas Trade in Food, Beverages and Tobacco by Value (£m), 2002-2006

Clothing and Footwear

Table 20: UK Overseas Trade in Clothing and Footwear by Value (£m), 2002-2006

3. Industry Background

RECENT HISTORY

NUMER OF COMPANIES

EMPLOYMENT

REGIONAL VARIATIONS IN THE MARKETPLACE

DISTRIBUTION

HOW ROBUST IS THE MARKET?

LEGISLATION

Planning Issues

Employee Rights

National Minimum Wage

Flexible Working

Working Time Regulations

Work and Families Act 2006

Sunday Trading

Healthcare Products

Community Pharmacy Contractual Framework

Control of Entry

REACH

KEY TRADE ASSOCIATIONS

British Home Enhancement Trade Association

British Retail Consortium

Company Chemists' Association

National Pharmacy Association

4. Competitor Analysis

THE MARKETPLACE

Market Leaders

Table 21: Selected Leading Retailers of Own-Brand Products in the UK by Turnover (£000), 2005/2006/2007

Aldi Stores Ltd

Company Structure

Current and Future Developments

Financial Results

Alliance Boots Ltd

Company Structure

Current and Future Developments

Financial Results

Arcadia Group Ltd

Company Structure

Current and Future Developments

Financial Results

ASDA Group Ltd

Company Structure

Current and Future Developments

Financial Results

John Lewis Partnership PLC

Company Structure

Current and Future Developments

Financial Results

Kingfisher PLC

Company Structure

Current and Future Developments

Financial Results

Marks and Spencer PLC

Company Structure

Current and Future Developments

Financial Results

Morrison PLC

Company Structure

Current and Future Developments

Financial Results

New Look Group Ltd

Company Structure

Current and Future Developments

Financial Results

Next PLC

Company Structure

Current and Future Developments

Financial Results

Primark Stores Ltd

Company Structure

Current and Future Developments

Financial Results

J Sainsbury PLC

Company Structure

Current and Future Developments

Financial Results

Tesco PLC

Company Structure

Current and Future Developments

Financial Results

OUTSIDE SUPPLIERS

Table 22: Selected Manufacturers, Distributors and Wholesalers of Own-Brand Products in the UK by Turnover (£000), 2005/2006/2007

Anglo Beef Processors

Arla Foods UK PLC

Cereal Partners UK

Christian Salvesen PLC

Dailycer Ltd

Dairy Crest Group PLC

Glanbia PLC

Grampian Country Food Group Ltd

McBride PLC

Northern Foods PLC

Princes Ltd

Robert Wiseman Dairies PLC

Tulip Ltd

Uniq PLC

MARKETING ACTIVITY

Table 23: Main Media Advertising Expenditure by Selected Retailers (£000), Year Ending June 2007

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

CONSUMER PENETRATION

Grocery Shopping

Preferred Day

Table 24: Preferred Day for Regular Main Grocery Shop (% of adults), 2006

Frequency of Shopping

Table 25: Frequency of Regular Major Grocery Shopping (% of adults), 2001 and 2006

Distance Travelled

Table 26: Distance Travelled by Consumers for Regular Major Grocery Shopping (% of adults), 2001 and 2006

Mode of Transport

Table 27: Mode of Transport Used for Regular Major Grocery Shopping (% of adults), 2001 and 2006

Expenditure Levels

Table 28: Expenditure on Groceries in the Last Week (% of adults), 2006

Pharmaceutical Shopping

Usual Place of Purchase

Table 29: Usual Place of Purchase for Pharmaceutical and Chemist Products by Sex, Age, Social Grade and Region (% of adults), 2006

Users of Chemists/Pharmacists

Table 30: Consumers Who Have Consulted a Chemist/Pharmacist for a Suitable Remedy in the Past 12 Months by Sex, Age, Social Grade and Region (% of adults), 2006

7. Current Issues

INDUSTRY ISSUES

Competition Enquiry on Impact of Branded and Own-Label Goods

Food Standards Agency Calls for Unity Over Labelling

Corporate Accountability of the Retail Giants

Organic Produce and the Supermarkets

CORPORATE DEVELOPMENTS

ASDA Concentrates on the Non-Food Sector

Co-op and Spar Join Forces

Northern Foods Continues to Struggle

8. The Global Market

GLOBAL TRENDS

EUROPE

THE US

AUSTRALIA

ASIA

9. Forecasts

THE ECONOMY

Gross Domestic Product

Table 31: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2007-2011

Inflation

Table 32: Forecast UK Rate of Inflation (%), 2007-2011

Unemployment

Table 33: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011

Population

Table 34: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011

FORECASTS 2007 to 2011

Table 35: The Forecast UK Market for Own-Brand Products by Value at Current Prices (£bn at rsp), 2007-2011

MARKET GROWTH

Figure 2: The Total UK Market for Own-Brand Products by Value at Current Prices (£bn at rsp), 2002-2011

FUTURE TRENDS

Demographics

Table 36: Projected UK Population by Age, 2002, 2006 and 2011

Market Segmentation

Product Development

Competitor Forecasts

10. Company Profiles

Aldi Stores Ltd

Alliance Boots Ltd

Arcadia Group Ltd

Asda Group Ltd

John Lewis Partnership Plc

Kingfisher Plc

Marks And Spencer Plc

New Look Group Ltd

Next Plc

Primark Stores Ltd

Tesco Plc

11. Consumer Confidence

METHODOLOGY

KEY FINDINGS THIS QUARTER

THE WILLINGNESS TO BORROW

Confidence Improves

Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Willingness to Borrow Slips Slightly

Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007

SPENDING FROM SAVINGS

Slight Increase in Spending from Savings

Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Saving Grows in Relative Importance

Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007

12. Further Sources

Associations

General Sources

Government Publications

Other Sources

Bisnode Sources

Abstract

This Key Note Market Report covers the UK market for own-brand products. In particular, it focuses on own brands in the following sectors: groceries; clothing and footwear; do-it-yourself (DIY) products; cosmetic and toiletries; and over-the-counter (OTC) medicines.

Key Note estimates that, in 2006, the total value of own-brand sales was £72.1bn. This represents an increase of 18% over the review period (2002 to 2006), which is almost twice the rate at which total retail sales increased over the same period (9.5%).

Growth rates within the market reflect both the growing popularity of own-brand goods among consumers and the increased range of goods now widely available. No longer found only in the low-cost grocery sector — the birthplace of the own-brand market — goods now span a diverse range of markets and are bought by an equally diverse range of consumer lifestyle groups. Grocery ranges have moved from `no-frills', basic items to premium goods with highly targeted customer segments. Own-brand goods have expanded heavily into the non-food sector, with the sectors covered by this growth having demonstrated the most significant development.

Supermarkets Tesco and ASDA are both capitalising on the growth of own-brand non-food goods, especially in the clothing sector, where these two retailers are now among the top three clothing retailers in the UK. With a steady flow of cheap imports from China and the Far East, supermarkets and retail groups such as Primark can continue to offer low-cost own-brand clothing and other non-food items, in their bids to expand their own-brand portfolios.

The growth in own brands has shifted the power in the retail supply structure to the retailer, instead of the brand owner. Retailers now control category price setting and are more adept at promoting their own goods in store. By offering their own brand labels they can reap higher profit margins and, with the huge quantities they purchase, they can bargain hard with their suppliers.

The own-brand market appears to be highly resilient to economic changes, so the outlook appears very positive. Over the 5 years to 2011, sales are forecast to rise ahead of inflation, as retailers continue to diversify into new areas and consumers become more accustomed to purchasing own-brand goods.

Should economic conditions in the UK worsen, it is likely that a strategy of more basic own-brand products would succeed; should conditions improve, a move to more premium products would be in order.

As consumers become ever more accepting of own-brand goods, they will naturally be developed in new and emerging markets. In 2007, Marks and Spencer and Tesco were moving into electrical-goods markets, such as televisions and computers. With Tesco ready to take on the likes of Mircosoft with some of its new own-brand software products, it seems that no multinational brand can escape the effect of own branding.

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