Metro Refreshes Real Brand
Real hypermarkets feature large fresh foods departments stocked with a wide assortment of deli, chilled meals, and specialty foods.
Metro gives boost to private label segment with three new real,- store brand ranges: real,- Quality, real,- Bio, and real,- Selection.
When in 2003, Private Label International last profiled the private label segment in Metro AG’s real,- hypermarkets, the company’s private label offering was behind main rivals in a private label market that was not very well developed or innovative in the first place. In an even more pronounced fashion, real,- exemplified a rather lackluster approach that many German retailers used to display towards private labels, in particular the reluctance to incorporate the store fascia into private label brands: it did have TiP, a strong and extensive budget range in basic (and not very appealing) packaging, but the low mid-price price segment was covered by a large number of “fancy” brands that had no recognition value at all, bore no relation to the retailer and were usually not recognizable to consumers as real;- private labels.
The private label landscape in Germany has started to change noticeably over the last two or three years. Most notably, retailers are beginning to see the potential in generating greater customer loyalty by incorporating the store fascia or logo into their private label brands. A tentative start was the launch of Kaufland’s K-Classic in 2005, while the trend gathered momentum with the introduction of the Rewe range by Germany’s second largest supermarket chain Rewe in 2007. Leading supermarket chain Edeka is currently in the process of quietly adding the Edeka name to its mid-priced private label products, using the previous brand names as a sub-brand.
New Real Brands
Metro Group operated 440 hypermarkets in five countries - Germany, Poland, Romania, Russia, and Turkey - as of 30 June 2009. It plans to enter the Ukrainian market this year.
In this trend, a driving force certainly is also Metro as just over one year ago, in September 2008, it made a fresh start with the launch of three new private label ranges, all incorporating the store fascia: real,- Quality, real,- Bio and real,- Selection. This new trio replaced all other previous own label brands – no fewer than 20. In addition, TiP remains as the real,- discount range with some 800 products.
The new own label products are part of real 2010, an overall rejuvenation strategy. At the launch, real,- CEO Joël Saveuse said the medium term target is for private labels to account for up to 25% of food sales by the end of 2010, from some 15% in 2008. For the first half of 2009, real has reported an increase in the private label food share to 16%.
“With the introduction of our three new private brands, we are in a better position than virtually any other competitor in Germany. As soon as by next year, the private brands should bring improved customer loyalty, increased sales and profit margins. Our medium term objective: up to 25 percent private brands in the food sector,” said Joël Saveuse, in a September 2008 press release announcing the launch of the new store brand ranges.
In terms of presentation, visibility and marketing support, real,- has become one of the frontrunners, if not the frontrunner in the German private label market. While Edeka’s revamp is proceeding rather quietly and not visible at all in stores visited by Private Label International, the real,- launch was supported by a national TV campaign, and it is virtually impossible for shoppers not to notice real,-Quality in particular: real,-Quality products are advertised on large billboards on the car parks, while photos of real,- Quality products as well as the logos are positioned throughout the store. On the shelves, own label products are not banished to the bottom shelf, but positioned as a block, in some cases over several levels. This approach is not only used for the three mid-priced brands, but also for the TiP budget range. Several prime front site shelves are solely devoted or carry large blocks of real,-Quality or even TiP. Real,-‘s own label products – again, including TiP, are regularly featured in the weekly store brochures distributed to households, while from time to time the company also issues special brochures devoted solely to its own label products.
Advertising Boost
And the strong advertising pressure and catchy name are already paying dividends: in March 2009, just five months after the launch, real,-Quality ranked third in the Private Label Monitor conducted by market researcher Dialego with a 77% brand recognition - behind Rewe’s Ja! (92%) and Edeka’s Gut und Günstig (81%). Furthermore, it reached the highest degree of correct attribution, with 94% of respondents correctly identifying it as a real,-brand.
Among the new products, the core brand is real,-Quality which covers a wide range of segments, both food and non-food. Segments where consumers can find real,- Quality products include baking ingredients, cosmetics and toiletries, meat and sausage, drinks, frozen food, dairy products, confectionery, packaged food, fruit and vegetable, fresh produce, bakery products, Italian food products, pet food, household goods but also electronic goods and car accessories. Real claims these products are similar in quality to top brands, but priced considerably below. The initial launch comprised some 600 products, and it reached some 1,500 in August 2008, which amounts to several new products introduced every day. The final target is some 2,400 products.
Real,-Quality products are available in all 350 German stores, as well as in the foreign markets where real,- has a presence including Poland, Russia and Romania.
