The effects of inflation and unemployment has greatly changed the way Brazilians consume. A recent survey showed that consumers are now giving preference to private labels from supermarkets.
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In the first four months of 2022 alone, this type of product had a 7.68% increase in sales. With this growth, establishments are expanding this type of product.
NielsenIQ collected some data showing that 34% of Brazilian households have a private label product, and among supermarket purchases, about 7 items in the cart are of this type.
For supermarkets and pharmacies that make this type of sale, profit becomes greater. That's what explains Roberto Butragueño, director of retail at NielsenIQ: “The private label is a component that helps a lot in the medium and long term growth of the retailer. It helps the brand's profitability, and allows it to offer an offer at a competitive price, making the consumer keep coming back”.
For Eduardo Finelli, director of exclusive brands at GPA, this type of product is a strategic pole for supermarkets. Only in GPA, 21.5% of sales in the first quarter are private label products. In the same period of 2020, the number was equal to 18.7%.
This is also good for the smaller brands that supply their products to be rebranded by the establishments, as the partnership makes it much easier for the companies to sell and grow.
According to Butragueño, Brazilians do not usually exchange their favorite brands for supermarket brands, but this result is due to the financial crisis we are going through. Even so, according to him, the consumer still prefers to keep the brands and buy in smaller quantities.
For large establishments, the difficulty lies in finding smaller companies that make this type of partnership and manage to distribute to all regions of the country. And this needs to be done at a cheaper price, as it needs to represent competitiveness with other brands.
The specialist also sees the moment as a great potential for brands, offering added quality to a good price, so that they can conquer the taste of consumers, making them not go back posteriorly.
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