French chain Carrefour has removed almost all A-brands products from the shelves in four stores, in order to test the consumers’ willingness to buy only private labels.
Part of the major transformation plan CEO Alexandre Bompard announced earlier this year, this move aims to lift the share of private label turnover to 33 %. Retail watcher Olivier Dauvers was the first to discover the test and shared it on his blog, describing it is an unprecedented experiment: not all national brands disappeared from the shelves, but private labels now represent up to 80% of the facings. Big French brands like Teisseire are nowhere to be found in the stores in Rouvroy (Pas-de-Calais), Rubelles (Seine-et-Marne), Saran (Loiret) and Ville-du-Bois (Essonne).
Private labels are important because they contribute to a retailer's brand image and they are cheaper than A-brands, while at the same time generating better margins. With a well-developed private label offer, a retailer can take a stand out against dominant brand manufacturers. Still, this is a remarkable move, considering that retailers who until recently only sold private labels (like Aldi or Lidl) now include more and more brands in the assortment.
Carrefour is not the first major retailer to test the potential of an exclusive private label range: Belgian competitor Delhaize tried it in its Delhaize City format (which was discontinued in 2012) and in its low-cost format Red Market (also already discontinued).