Private Label

Michał Sikora, Tesco Polska Press Officer

Monday, 22 June, 2015
Today, as many as 97% of customers in Poland willingly buy private label products. As many as 83% of them appreciate the low price of the products, while 64% of customers mentioned the good price / quality relationship. Therefore, there is no wonder that private label products constitute such an important category for all retail chains.
The retailer always needs to keep up with customer needs, while product quality is the main criterion they use for choosing the store for their daily shopping. At Tesco, we can see a strong correlation between the product’s image and the brand’s image. The collaboration with Robert Makłowicz, a culinary expert, gives our customers certainty of the quality of the products offered under the Tesco brand. This proved to be a milestone on the road to building a strong private label in Poland. Furthermore, we introduced a “Satisfaction Guarantee” mechanism in 2014, which gives customers 30 days to decide and possibly return the private label products they are not satisfied with. This is the first initiative of its kind on the Polish retail market, which shows how confident we are in the quality of our products.

Our idea for private label also includes an appropriate product range and segmentation, which requires having more than one brand. Therefore, our range contains exceptional tastes from all over the world under the Finest brand name; we have Tesco products guaranteeing the quality of the market leaders, as well as Value, which, for consumers, is always synonymous with the best price in a category.

One of our business priorities is currently the constant development of our own brand. The end of 2014 brought an extension of the range within the Finest brand, namely exclusive, high-quality products from selected ingredients. These products are successful with customers, which is why we shall expand the range of products available within Tesco’s Finest brand to include more categories, also in cooperation with Polish suppliers. The Tesco brand can boast numerous industry and consumer awards won in 2014. In turn, we offered customers more than 300 new products from 136 suppliers, in new, attractive packaging in the Value line in the autumn of last year, which were tested by 12,000 customers.

According to Tesco, the private label should offer something more today than just an alternative to popular products. We believe that innovative products are evidence of an innovative company, that private label can set new directions and new market trends. A good example of such innovation is the wide range of Tesco laundry capsules, created at Tesco’s Central European Innovation Centre, which was opened in December and which is responsible for the development of new private label products to be available on our European markets.

The private label of Tesco Polska currently accounts for approximately 1/4 of total sales – this segment still has strong growth potential. The guarantor of its growth is our chain’s close collaboration with suppliers, assuming a modern model of work. The key to success is bilateral development, the search for synergies, the exchange of experience and innovativeness in terms of ingredients or packaging. The benefits to suppliers include a transfer of knowledge and skills, access to new technologies and the discovery of new niches on the market. Private label to a supplier is also an increase in sales volumes and new export opportunities, of which Polish companies know how to take advantage. Working with Tesco has meant that Polish suppliers currently export their products to the United Kingdom, the Czech Republic, Slovakia, Hungary and, recently, even to... China and Hong Kong!

tagi: Michał Sikora , Tesco ,