Mon, Mar 01, 2004 page10

• Supermarkets pushing their own brands

  BUDGET GROCERIES Supermarket chains are trying to persuade customers to overcome their fear of store brands by assuring them that quality will be high

  • By Amber Chung / STAFF REPORTER
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  Supermarkets' own brands, long frowned upon by customers, are set for a boost this year.

  Wellcome Supermarket (頂好), the nation's largest supermarket chain, last week expanded two of its own-brand ranges -- the budget "No Frills" brand and the more upmarket "First Choice."

  Wellcome hopes sales of the 500 products sold under these two brands will rise from 3 percent of sales last year to 5 percent this year and 10 percent the year after, according to Shane Neal, head of its own-brand business division.

  Neal said own-brand products make up 22 percent of total supermarket sales in Europe and 16 percent in North America, but just 4 percent in the Asia-Pacific region. He expects this sector to grow about 14 percent growth in Asia-Pacific this year.

  Carrefour Taiwan, the nation's largest hypermarket chain with 31 outlets, introduced its second own-brand, "No. 1," earlier this month. It already has its Carrefour-branded items on the shelves.

  While retailers have high expectations for own-brand sales, they will have to overcome the lack of confidence consumers have in the quality of such brands.

  "Though retailers offer their own brands at lower prices than the renowned brands, I still question the quality as I had a few unpleasant experiences before," said Eleanor Chen (陳穎芸), a 30-year-old human-resources specialist who shops in hypermarkets once a week and spends more than NT$2,000 each time.

  "I once bought retailers' cooked meat stew which tasted stale and their own-branded mutton hotpot that tasted awful," she said. "I now only buy private-label necessities such as tissues, but not fresh or cooked foods."

  Another consumer said she only bought retailer-branded sundries, such as cleansers or goods that did not require high quality, such as cheap clothes for work.

  "When it comes to food or things concerning health, I would have higher confidence in the own-brands of reputed foreign retailers like Costco or Tesco," said Pan Su-lan (潘素蘭), a 56 year-old hospital worker who shops in hypermarkets twice a month and spends about NT$5,000 each time.

  Tesco Taiwan has 300 kinds of imported private-label goods and 150 kinds of locally made own-brand items. The UK-based retailer said consumers were worried about the own-brand products, according to customer surveys.

  "Our local manufacturers all have ISO certification and comply with national hygiene standards, like CAS, and customers' confidence in our own-brand products has risen, as shown by our survey sampling more than 2,600 customers last year," said Sarah Wu (吳明君), Tesco's corporate affairs manager.

  To assuage consumers' concerns, Carrefour said it would not sacrifice quality just to reduce prices.

  "We can save on the huge advertising costs of brand names and, as a result, are able to offer own-brand products at lower prices," said Allan Tien (田中玉), Carrefour's spokesman.

  But Tien acknowledged that it may take time to develop consumers' confidence in the quality of own brands.

  "We inspect manufacturers of our own-brand goods at least four times to ensure our customers get high quality," he said.
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