SYDNEY: Shoppers in Australia are increasingly facing the problem of branded goods "disappearing" from supermarket shelves, as the country's leading retailers look to expand their own-label ranges.
Choice, the consumer information title, stated in a report that Australia's two biggest supermarket chains, Coles and Woolworths, currently hold 71% of the grocery category and take a combined AU$1.04bn a week.
Based on figures provided by research group IBIS World, the report also revealed that private label makes up 25% of the products available in these stores at present, a total predicted to hit 33% by 2016.
The analysis suggested this formed part of a broader issue of branded products "disappearing" from Coles and Woolworths, harming manufacturers and often being replaced by "copycat" own-label lines.
"At the end of the day, the retailer owns the store and can do whatever they want," Tim Morris, managing director of Coriolis Research, the consultancy, said.
"They can put rival products on the bottom or top shelf, and their own products at eye level. They can manipulate the price. The only controls are competition and the consumer."
One reason for the shift towards store brands, the study said, was the "race" to reduce prices and maintain profits. Coles, for example, has cut the cost of 6,000 products by an average of 10% each.
Grant Muller, head of FightBack News magazine, which champions goods made in Australia, asserted that retailers had several in-built advantages.
"All the costs that other brands have to pay mean home brand products have a 30% price competitive advantage, because obviously they don't charge their own products," he said.
But John Durkan, merchandise director at Coles, argued it only stopped selling lines that failed to reach expected performance levels, and could fill real gaps with its own offerings.
"We don't have elastic shelves and we have to keep stock for customers, not products that are not working," he said. "Where we don't see innovation from branded manufacturers, we'll use the Coles brand to innovate."
Australia also lags behind the UK on this measure, where own label delivers 52% of supermarket sales, according to Nielsen, with the top four chains - Tesco, Asda, Sainsbury's and Morrisons - taking 76% of the market.
Data sourced from Choice; additional content by Warc staff