Private labels will pose a "serious challenge" to brands in Saudi Arabia by 2009, according to Adham Junaidallah, executive vice president-support of Riyadh-based Al Othaim Markets, the second largest retailer after Panda in the Kingdom.
In his presentation The Private Label Boom at Nielsen's recent Consumer 360 Conference Winning Today, Transforming Tomorrow in Jeddah, Junaidallah said two out of three shoppers were aware of private labels and its top 10 categories are predominantly fresh produce, including fresh cakes, frozen fruit and ready to eat salads.
"Quite a number of the fastest growing food categories in our region are where private labels are strong worldwide, but few of the fastest growing categories in this region are where private label is popular," he said.
Private labels are expected to hit 15% of the food category size, he said, and fresh foods with value would be the key driver, with beverages and dairy products also holding potential to build brands.
Junaidallah showed that 11 of 12 selected private label product areas - including baby food, confectionery and snacks, - are showing stronger growth than manufacturer-branded products.
High brand loyalty across most categories, excluding, Impulse has been identified among shoppers in Saudi Arabia. Research has shown that 42% of consumers buy the same brands regardless of the store in the Carbonated Fruit Drinks sector.
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