Five months ago, Spain’s largest supermarket operator made the biggest splash in the country’s retailing history by eliminating 900 branded products from its shelves. The chain, Mercadona, owns the most popular private label in Spain, Hacendado.
Currently, the share of market for branded products in primary retail categories is more than 50 percent. The question is whether Spaniards’ bonds with brands are strong enough to avoid a shift toward a private-label-led retail model (as is the case in Germany).
Now Ipsos has issued a qualitative and quantitative study of Mercadona’s customers, finding that 40 percent are against the change and 30 percent are in favor of it. Another 30 percent are unsure. Overall, 55 percent said they are unhappy about having less choice, while 40 percent said they will shop elsewhere if they don’t find their usual branded products on the shelves. Sixty percent said there are some branded products they could not go without.
Meanwhile, a consumer movement, yoquieroelegir.com (“I want to choose”), has been created to defend the presence of brands in retail stores. And Pascual, the leading milk brand, is airing a TV ad explaining that private labels’ cheaper prices are the result of a real quality compromise.
It’s too soon to know if the Ipsos research reveals a solid sign of private label resistance, but it seems clear that in spite of the downturn, brand value is still healthy in Spain.
Fascinating research. A pressure for brands during an economic crisis!
Its interesting to see that out side of spain this is news! Here in spain, mercadona has image problem because of terrible worker relaciones aka this video form youtube:
http://www.youtube.com/watch?v=ZQSqItaondo
Clearly Mercadona relations with the employees is very far from the ideal. What they are looking for is to increase their benefit that has been hurt by the economical crisis, and the unbranded products are more beneficial for them.
I don’t know Pablo if one video from a local TV channel showing 8 mercadona employees (or not) it’s enough to afirm that Mercadona has a image problem… above all because actually is one most succesful spaniard brands and one of the most loved and respected companies in Spain.
here you have more info about its finance results:
http://www.mercadona.es/corp/ing-html/noticias.html
and here you can see an article about its reputation in Spain, an amazing fourth position in whole Europe:
http://www.ambsingapore.um.dk/en/menu/CommercialServices/MarketOpportunities/News/LEGOistheMostRespectedCompanyintheworld.htm
regards from the spaniard streets!