Countdown phases out Homebrand

Countdown is rebranding its private label Homebrand as Essentials, following its Australian parent Woolworths' lead.

There are more than 2000 products labelled Homebrand, a bare-bones budget brand, and they will be retired over the next two years.

The New Zealand branch will also combine its Countdown Select and Signature Range brands simply into ‘Countdown,’ which it will pitch as a good-quality, mainstream brand.

Retail research firm Coriolis director Tim Morris predicted Countdown would retire Homebrand in favour of Essentials because of economies of scale.

“A lot of what you see in New Zealand is just a reflection of what’s going on in Australia — Woolworths and Coles are at each other’s throats and Aldi is taking market share,” he says.

The announcement comes a week after Woolworths said it would phase out the 33-year old Homebrand label because of negative consumer perceptions.

Woolworths chief executive Brad Banducci had signalled such a change previously, saying Homebrand has a “perception problem,” especially with consumers thinking Aldi’s private label is better quality.

Woolworths, the largest supermarket in Australia, has faced stiff competition from Coles and German supermarket chain Aldi in the past few years, both of which are gradually gaining market share.

NBR approached Progressive Enterprises, which trades as Countdown, after Woolworths’ announcement but it refused to comment.

In a written statement issued today, Countdown general manager of merchandise Chris Fisher says the change is “more than just a packaging change.

“We are reinvigorating our own brand products and reviewing each one over time to ensure we are delivering easily identifiable, quality products that suit our customers’ needs at low prices,” he says.

The first Essentials food product will hit shelves in May.

A report analysing private labels by Coriolis says supermarkets with a strong private label are the most successful, potentially doubling profits. New Zealand has a low penetration of private label sales compared to other developed countries, at roughly 10%, according to the report.

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