Private Label Strategy

FOUR

Competing for the Rational Consumer with Value Innovator Own Labels

Private labels as a percentage of Aldi’s $43 billion in sales: 95 percent

AS RETAILERS began to analyze the contents of the leading brands and according to their findings recreated them to produce copycat and premium store brands, they discovered that there were opportunities beyond simply copying the branded product. In fact, by brutally confronting each element of cost in the product against the objective value added to the consumer, they could create a good, perhaps even better, quality product at remarkably low prices. This included stripping away most, if not all, of the elements of imagery, like expensive packaging and “superfluous” features.

The champions at this ...