Love them or loathe them, private label products are taking over supermarket shelves

Supermarkets are stocking more of their own brands even as they shrink stores.
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Gary Mortimer, Queensland University of Technology and Louise Grimmer, University of Tasmania

Coles is aiming to have private label products make up 40% of its product range over the next five years. This increase will apply across multiple tiers of products, with a focus on quality, innovation and new strategic global relationships.

More supermarket-owned brands will mean lower prices for consumers and greater margins for the retailer. But the move could significantly impact Australian suppliers as their branded products are delisted and supermarkets seek out cheaper manufacturers overseas.

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In Australia, private label products currently account for 18.1% of all retail dollar sales. The proportion is similar in North America (17.7%).

This is significantly less than supermarkets in other countries. Private label products account for 41% of supermarket sales in the UK, 42% in Spain, 36% in Germany and between 27 and 32% in most other European countries.

Why private labels?

In one academic study, 85% of the retailers surveyed said “improved margins” was their main reason for investing in private label products.

A private label product with features and quality parity with national brands may cost retailers 40% to 50% less to manufacture and distribute to customers.

Some American convenience stores claim gross margins of up to 72% on private label bottled water, for instance, compared to 45% on branded alternatives.

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Overall, supermarkets see an 8-10% premium on margins for private label products over branded ones.

Private label products also help retailers differentiate themselves from competitors by giving them unique products.

Private labels have increased their footprint across many retailers, including discount department stores, liquor and convenience stores and traditional full-line department stores like Myer.

The flipside of private label expansion

The main fears about the continued growth of private label brands are that it could discourage suppliers from innovating with their products, jeopardise the livelihoods of smaller, independent suppliers, and ultimately result in less choice for consumers.

Consumers are currently benefiting from increased competition. Progressively higher-quality private label products are available at much lower prices than branded products.

Just a few years ago then Woolworths CEO Grant O’Brien said the company would put customers “before” suppliers.

Some researchers suggest that increasing private label ranges could impede innovation in the food industry. This is largely because branded manufacturers will have less incentive to invest in new products only to have them copied by the contract manufacturers who produce private label goods.

But a recent report from the European Commission actually found innovation in the food supply chain is not under pressure. And a quick wander through any major supermarket will illustrate the effort supermarkets are making to improve quality and introduce new product lines.

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Smaller, local independent brand manufacturers and wholesalers could be exposed to “delisting” – where a supermarket does not renew a supply contract in order to free up shelf space for its own private label alternatives.

Naturally, if Coles is aiming to increase the proportion of its own branded products, minor brands will be the ones to disappear from shelves, not major brands like Coke, Cadbury or Nescafe.

As for less choice, most shoppers will not notice the difference, or may enjoy the shopping experience more.

Supermarket shopping is notoriously a low-involvement, mundane and habitual task. Shoppers often visit the same supermarkets, buy the same products and browse the same aisle. In fact, studies continue to demonstrate that the “abundance of choice” is problematic for many shoppers, who simply seek an “optimal choice”.

Research shows that when faced with a “good, better and best” option, people choose the one in the middle. This is why we see supermarkets offering very basic generic private label products all the way through to “select” and “finest” options.

Accordingly, a successful private label strategy hinges on leveraging perceptions of both price and value. Private label products are a key weapon for Coles and Woolworths to compete with Aldi and Kaufland for price-sensitive customers.

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Australian supermarkets previously looked to local manufacturers to produce their private label ranges. However, Aldi, Kaufland, Costco and Lidl have found success by leveraging their global sourcing strategies, providing both quality and economies of scale, and so lower prices.

This appears to be on the cards for Coles. It has also announced a wish to develop new strategic global relationships to realise its 40% private label target.

This suggests that Coles may overlook local manufacturers, instead seeking out international manufacturers to produce some ranges.

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Coles’s announcement comes as supermarkets are getting smaller in the face of rising costs. Together, these trends could have long-term implications for the Australian grocery industry.

The presence of more private label goods will likely require domestic manufacturers to themselves produce more private label goods to minimise offshoring. But, in doing so, manufactuers will commoditise themselves, thereby giving retailers even more power.

Gary Mortimer, Associate Professor in Marketing and International Business, Queensland University of Technology and Louise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of Tasmania

This article was originally published on The Conversation. Read the original article.

What’s in the name ‘homeless’? How people see themselves and the labels we apply matter

The person using this shelter in New South Wales certainly meets the official definition of homeless, but how they see themselves is important.
Bidgee/Wikimedia Commons, CC BY-SA

Zoe Walter, The University of Queensland; Cameron Parsell, The University of Queensland; Genevieve Dingle, The University of Queensland, and Jolanda Jetten, The University of Queensland

Homelessness continues to be a contentious issue in Australia. Earlier this year, Victoria Police Chief Commissioner Graham Ashton asserted:

There’s no reason people should be sleeping on the street, there are no reasons people should be homeless … There’s more than enough beds and accommodation for people to access.

Aside from the question of whether these claims are correct, homelessness is not as easily resolved as just giving people a bed and roof over their head. For a start, it is not just people sleeping on the street who are considered homeless. People using various forms of marginal and insecure accommodation legitimately lay claim to that label.

Using the Australian Bureau of Statistics definition, people who do not have suitable accommodation alternatives are considered homeless when:

• they live in dwellings that are inadequate;

• they do not have stable tenure; or

• they do not have control over, or full access to, space for social relations.

Looking at this definition, it becomes clear that determining whether someone is homeless or not is not straightforward. By this definition, giving someone a bed in a shelter is not sufficient to resolve their homelessness. What’s more, we have long known that people sleep rough because they feel safer on the street than in some homeless accommodation.

How do people see themselves?

Even though these points are increasingly being recognised, what these debates neglect is that the “homeless” person’s perceptions of their situation might be just as important as how others classify them.

Do they feel they are homeless when they sleep on the street? Do they consider that they are no longer homeless when they have a bed in a shelter? And, importantly, do they even describe their situation as homelessness?

We examined this question in a large-scale research project with the Salvation Army. We started by exploring how many people who were staying in crisis homeless accommodation would see themselves as a “homeless person”.

We found that 55% of people staying in homeless accommodation provided by The Salvation Army identified as “homeless”, and 31% rejected that label.

14% were ambivalent about categorising themselves as “homeless” – they neither fully accepted nor rejected the label. For example, they said they were “not 100% homeless” or that even though they might “technically” be classed as homeless, they did not see that as an accurate way to describe their situation.

The reasons people gave for their responses reflected the complex and varied nature of what is meant by “home”. Some saw themselves as homeless because they did not have the stability, security or privacy bound up in our Western notion of home. As one woman put it:

… at the end of the day there’s a time limit on my stay and that’s not what I would class as stable, safe accommodation.

For others, their shelter accommodation did represent stability and security. As one male participant explained:

To me, homeless is on the street. This is a hostel, it’s a refuge, it’s a roof over your head, a shower, food, so I wouldn’t say I was homeless. I’ve got somewhere to go every day to sleep, so I wouldn’t say I’m homeless.

Others simply said the shelter felt like a home. It thus appears that not everyone who meets official definitions of being homeless defines themselves as such.

Labels affect people’s wellbeing

So, what’s in a name? When it comes to homelessness, the answer may be of considerable importance.

In our research, we found that the wellbeing of people who refused to define themselves as “homeless” was significantly higher than the wellbeing of those who had adopted the label to describe themselves.

Somewhat surprisingly, people who had experienced chronic homelessness in the past were no more or less likely to self-categorise as homeless than people who had few or no previous homeless experiences.

How people saw themselves also had no impact on their use of the services. Participants who rejected or were ambivalent about the homeless label reported rates of use similar to those who accepted the label.

It thus appears that when it comes to mental health, when we adopt a label to describe ourselves, we start to think and act in ways that align with the stereotypes of that label.

In this case, despite the diversity of experiences of homelessness, those who accept the homeless label internalise the rejection and even dehumanisation that homeless people experience from mainstream society. This is associated with significant social and emotional costs.

What are the lessons for service providers?

The Salvation Army has changed both its practices and the language it uses in providing shelter to people in need.
Gnangarra/Wikimedia Commons, CC BY

Given the importance of self-definitions for mental health and wellbeing, understanding how people see themselves has important policy implications.

Our research shows that not everyone who needs crisis accommodation defines themselves as a homeless person. However, individuals must typically self-identify as such to gain entry to homeless services.

This means these people are required to adopt a view of themselves that is in and of itself associated with negative wellbeing outcomes. There is a need for housing and supported accommodation that does not put pressure on people to identify as homeless and thus to carry the baggage associated with that label.

Fundamental needs, such as a need for housing, should not be tied with categories and identities that assume who someone is and what they are perceived to lack.

The Salvation Army has taken these insights further and translated them into practice principles. These take as a starting point that, in delivering services, it is important to avoid seeing people through the lens of their current and past housing challenges.

Concretely, this has, for instance, led to changes in the use of spaces. In several shelters, the Salvation Army have removed physical barriers between staff and residents and created more independent living space. The idea is that by undermining categories of “service staff” versus “service users” the homeless label will become a less prominent way for the latter group to categorise themselves. This should in itself be empowering for residents.

Other changes to service delivery are not as tangible, but are equally important. The language the Salvation Army uses has changed significantly, with the aim of treating people as active agents of their life and members of society, rather than passive recipients of services.

These changes in practice are subtle and not easily described, but they represent a significant change in the ethos of the service. For example, services no longer use terms such as “homeless people” as the main way of referring to people using the services.

These ideals reflect a broader change in how homeless services are provided to people. Homelessness accommodation providers, social service providers and governments must ensure the language they use and, importantly, the language and labels applied to people using services do not assume that needing assistance is a defining trait of the individual.

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This article was co-authored by Chris Deighton, The Salvation Army Operations Manager Queensland, Accommodation and Housing Services, Australia Eastern Territory.

Zoe Walter, Postdoctoral Research Fellow, The University of Queensland; Cameron Parsell, Research Fellow, The University of Queensland; Genevieve Dingle, Lecturer in Clinical Psychology and Director of the UQ Psychology Clinic, The University of Queensland, and Jolanda Jetten, Professor of Social Psychology, The University of Queensland

This article was originally published on The Conversation. Read the original article.

Iranian State TV reported about the arrest of Christians

In its news night program on Friday 10th September Iranian State television announced that nine people had been arrested on the charge of carrying out evangelism just outside Hamedan. The report was announced by one of the security authorities, reports FCNN.

In this report State television mentioned that two of these people were being supported by organizations that are based outside the country, in particular the United States and Great Britain, but they did not mention the nationalities of these people.

In this report it has been said that: ‘the other seven people who were arrested are Iranian and were cooperating with these Christian-Zionist organizations’. This report labels the arrested people as ‘Christian Zionists’ and ‘evangelicals’ but it did not say anything about their relationship with Israel or Zionists.

In the Iranian government culture ‘Christian-Zionists’ is a title that they use to call Evangelical Christians who are benefiting from having access to a number of networks and TV satellite programs for evangelism.

This State TV report has not been reflected in other media and it is only the Fars news agency, which is connected to the Revolutionary Guard, which has mentioned that people had gathered to thank the security agents of Imam Mahdi and the legal authorities. This news agency has also published the lecture by Chief Justice Hojat Al-Islam BeegLare on this matter.

During the last few months and years there have been several times when Christians in home groups and new converts have been arrested by security agents, but this appears to be the first time in three decades that the State TV has broadcast the news of the arrest of a group of Christians in its program for a particular purpose.

Report from the Christian Telegraph