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 Internatonal, 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.
The new Real Quality brand range features a wide assortment of food products including imported pasta from Italy, specialty rice mixes, and sweets.
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.
Most of the products currently offered under real,-Quality are standard varieties or flavors that can also be found in rival’s private label ranges, although already at this early stage the range is wider than that of other retailers. For example, in packaged food there is a large selection of nuts such as pine nuts, pecan nuts or pistachio nuts as well as dried fruit which most other retailers only cover with significantly more expensive branded products, and some varieties not at all.
Price Appeal
However, the main selling point clearly is the price against branded product, with better packaging suggesting better quality and greater desirability compared to TiP. Cosmetics and toiletries include a range of baby care products such as baby wipes (€2.99 for a pack of 160) or a baby bath (€1.99 for 500ml) as well as nappies. The cosmetic products range was still somewhat limited at the time of writing, consisting mainly of some suncare products and soaps and cleansing wipes. Household cleaning products include 5-in-1 dishwashing tabs at €4.99 for a pack of 30 and 7-in-1 dishwashing tabs at €4.99 for a pack of 28. By contrast, 5-in-1 TiP dishwashing tablets are €3.19 for a pack of 40, while leading brand Calgonit finish Max is €6.99 for a pack of 26. Hand dishwashing liquid is €1.29 for a 600ml bottle – compared to €0.75 for a 1l bottle of TiP and €1.75 for a 0.6l bottle of leading brand Pril. Other real,-Quality products include toilet fresheners, toilet cleaners and stain removers.
Real,-Quality soft drinks include apple juice, banana nectar, breakfast juice, apple and cherry nectar, multivitamin juice, grape juice and orange juice, all in 1l plastic bottles at €1.19, while it also includes not-from concentrate orange, grapefruit and pineapple and apple juice at €1.39 per 1-litre carton. TiP orange and apple juices are €0.79 for a 1l tetra pack. Among carbonated drinks, real,-Quality offers Cola, Cola Zero and Orange and Lemonade carbonate at €0.59 per bottle, compared to €0.29 for equivalent TiP products, and €1.19 for a bottle of Coca Cola, Fanta or Sprite. Flavored mineral waters are available in the varieties Strawberry, Cherry, Orange, Peach and Lemon, all at €0.59 per bottle.
Frozen products include various kinds of vegetables, fish, meat, bakery products, ice cream and ready meals. The ice cream range is still rather small, and includes the Magnum copy Mattea at €1.99 for a pack of four. Ready meals are more unique with a number of products where there is no direct branded equivalent, such as Chicken Tikka Massala, Cashew Chicken with Soy Sauce, Bami Goreng, Curry Chicken, Farfalle Funghi in Mushroom Cream Sauce or Ku Ly Yuk Chicken in Sweet and Sour Sauce, all priced between €2.69 and €3.29, alongside staples such as Spaghetti Bolognese, Paella, beef and potato or sausage with mash.
Dairy products consists of a number of yoghurts in fairly standard flavors such as cherry, strawberry, hazelnut and peach & maracuja, all at €0.45 per 250g grams. The same flavors are also available as cream yogurts. Chilled drinks are three coffee drinks – Cappuccino, Espresso and Latte Macchiato, all at €0.89 per 250ml. Again, these are pretty standard choices, reflecting the common denominator of a large number of branded offerings.
Packaged food products include a wide selection or rice, pasta and mashed potato as well as the chilled products such as pasta sauces (Arrabiata and Pesto) and filled pasta (ravioli filled with spinach, tortelloni filled with meat, ricotta or cheese). Examples of cereals are Fruit Muesli and Crunchy Muesli with either Honey or Chocolate, all at €2.29 for 500g. Real,-Quality also includes a wide range of canned fruit and vegetables.
The real,-Quality brand also stretches into a number of non-food items, including plastic boxes, compost, ironing boards, picture frames, plastic laundry baskets, empty CDs and DVDs as well as car engine oil and fluid.
Real Bio
Real Bio is the retailer’s new organic food brand as seen here on fruit juices.
Real,-Bio is the new brand for organic products, replacing the previous Grünes Land brand. The range currently consists of some 200 products. Examples include fruit juices such as Apple Juice at €1.29 per litre, Orange Juice or Tomato Juice (€1.49) or Grape Juice (€1.99). Packaged food products include cereals such as Cornflakes at €2.29 for 375 g, various mueslis at €2.49 for 500g as well as honey, rice, sugar, pasta, packaged bread, packaged sausage and meat, lentils and tea. There is also a growing range of dairy products including fresh and UHT milk (around €1.00 per litre), mozzarella (€0.99 for 125g) or flavored frommage frais desserts (€0.59 for 150g).
Real Selection
The third brand is real,- Selection, launched in time for the holiday season at the end of 2008 as a premium brand that, according to real,-, is “characterized by exquisite ingredients and a packaging design that is just as appealing as that of well-known premium brands.” At the moment, real,- Selection is confined to chocolate products and comprises just over 20 products. Examples include Finest Swiss Chocolate in various varieties such as Milk Chocolate,
trawberry & Pepper and Dark Chocolate, all at €1.49 for 100g. By contrast, a tablet of Lindt Swiss chocolate, one of the leading premium brands, cost from €1.99 upward. Other real,- Selection chocolate tablets are even cheaper, such as 100g tablets for €1.19 , 200g tablets for €2.29 or 300g tablets for €3.39. At the time of writing, real,- did not offer chocolate under the real,-Quality brand, but under the TiP brand at €0.39 per 100g. The real,- Quality snack and confectionery range at the moment consists mainly of crisps and nuts and a wide selection of biscuits.
