Own label is now a key part of several retailers’ strategies, offering a point of difference to consumers and helping the stores in that all important race for market share. But with chains investing more and more in their own ranges – and with shelf space already at a premium – could private label actually be having a damaging affect on the overall toy market? Samantha Loveday takes a look
Supermarkets – and other retailers – are increasing their commitment to own brand ranges. Great news for consumers, but is it an own goal for the rest of the toy industry...?
THE ARGOS-owned Chad Valley is the third biggest toy brand in the UK, with revenues of £430 million in 2010/2011 (the latest official figures published). Sainsbury’s is planning to significantly expand its Grow & Play line. It already includes wooden products, soft toys, bath products and classics such as stacking cups and blocks. Tesco’s exclusive
Carousel pre-school range continues to grow in stature, and covers everything from creative and wooden products, through to musical and bathtime toys and vehicles. Toys R Us’ UK MD Roger
McLaughlan recently revealed to Retail Weekthat he wants 50 per cent of the chain’s offer to be exclusive to TRU, which includes plans to up its own brand line-up.
32 February Asda has its Play and
Learn label, Morrisons- owned Kiddicare has major ambitions to expand its presence going forward, and even John Lewis has given more visibility to its own brand toy offering. In an economic
environment where every penny counts for the consumer, own label – or private label – has become a key battleground. The lines assist the retailer in providing a better mix of margin across the complete offer, bringing up the overall value of their categories.
But, with shelf space
already stretched to bursting point, and many retailers still unwilling to take risks on new brands, could the overall toy market be taking a hit from the success of this strategy?
“Private label is a fact of
life and here to stay now, whether we like it or not,” says Neil Bandtock, MD of Vivid Imaginations. “In some categories it adds valuable choice for the consumer and when done well is a
more profit to the sector for retailers that has to be a positive.”
Ian Wickham, sales
director at Re:creation, agrees that if toy space doesn’t shrink at retail because the margins are
“Any branded manufacturer that is not concerned by private label alternatives is naïve or foolish” Neil Bandtock, Vivid Imaginations
credit to the industry. “When done badly, it
downgrades the retailer’s brand image and drags the industry down in the eyes of the consumer. Retail margin expectations are generally balanced by higher margin private label goods, so if it helps bring
held up by own label, then this could be a good thing. “The negative,” he points out, “is when own label comes out as a direct counter to a brand, where the investment is being made to deliver – TV, promo support, press, online, seeding campaigns, etc.
“This potentially shrinks
the overall opportunity for the brand and shortens the shelf-life of the products being marketed.”
ON THE SHELF Loss of shelf space to private label is, of course, a primary concern for suppliers. However, Tom Folliot, buying manager for toys at Sainsbury’s, is quick to point out that the supermarket works very closely with its suppliers, both in the UK and internationally – and that it is all about balance. “The two can, and do, co-
exist,” he firmly states. “It’s about offering variety at competitive prices. Sainsbury’s has been selling own label toys since 2000. The decision to launch the new Grow & Play range [which debuted in