Home Brand scrapped after more then three decades
Woolworths is scrapping its no-frills Homebrand line in favour of its similarly priced but more upmarket Essentials brand, a year after flagging that consumers had fallen out of love with it.
Reacting to the increased perception that the Woolies Homebrand reflected low quality as well as low price, the embattled retailer will rebrand its house label lines over coming months.
The move to scrap the brand is the first major initiative to be undertaken under new CEO Brad Banducci, who took the helm at the end of February.
Brad Banducci signaled possible changes to Homebrand last year
Woolworths confirmed the move to consolidate under the Essential line was now underway.
“We have been reviewing the products in all of our own brand ranges to ensure we deliver even greater quality and value for our customers,” a spokesperson said.
“Part of this review will see our current value ranges, Homebrand and Essentials, consolidated into one improved value range called Essentials. The Essentials range as the name suggests are products every home needs both food and non food.
“When customers see each product move to the new Essentials packaging they can be assured the product will offer market leading value for money for our customers.”
The distinctive red-and-white packaging had become a mainstay of the supermarket in the 1980s when the economy was battling under the “recession we had to have” and home-owners were burdened with interest rates of up to 16%.
Barry Urquhart, head of retail analysts Marketing Focus, described the move as the “unforeseen consequence” of the changing market.
“Long-term, traditionally about 12% of Australians have been influenced to buy Black & Gold; cheap generic products,” Urquhart said.
“In pursuit of increased profits Coles and Woolworths have increased that market share of house brand to anywhere from 23% to 28%, but in so doing the expectations of and the acceptance of house brands by consumers has improved appreciably.”
He said that the impact of Aldi on the Australian market could not be underestimated with shoppers flocking to the German brand with little more than its own house brands on the shelf at a rate greater than that experienced in any other market where the supermarket chain has opened its doors.
“The market expectations of Aldi and its products is seen to be better quality and therefore better value than Coles or Woolworths so dropping the bottom end of the product range at Woolworths is appropriate, timely and the sort of thing that you can’t go back on,” he said.
Urquhart said he expected Woolworths to use the Essentials line as part of its marketing going forward as it works to build foot-traffic through the stores.’
In February Woolworths dumped ad agency Leo Burnett, moving the account back to M&C Saatchi after several years away from the agency.
Along with the appointment of the new CEO, the brand has also seen a complete turnover in its marketing department over the past year with a number of high profile departures.