The Future of Private Label in Africa

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SUPERMARKET SHARE OF GROCERY



Supermarket penetration is low except in southern Africa. But it is growing rapidly and is becoming increasingly competitive

INCREASING COMPETITION



2000+ stores across 14 countries, market leader in several (e.g. South Africa, Nigeria, Angola)



On track to become the largest retailer in Egypt and Kenya by 2021



720+ stores in Egypt and Morocco and growing rapidly



Market leader in Senegal, 150% revenue growth year on year



Most domestic supermarket chains in Africa are ill-equipped to compete effectively with large international chains

COMPETITION PROFILE



Although modern supermarket retail penetration is low, in the major city most countries have at least some small chains

DO CONSUMERS CARE ABOUT BRANDS?

✔ Trusted, often through generations

✔ Guarantee of quality

✔ Status symbol

✔ May be more consistently available

✔ Retailers sometimes seen as price gouging

Several competitive national chains

Some national chains

Some small, localised chains

Few supermarkets, some small chains

Few supermarkets, no chains

PRIVATE LABEL *AS* BRANDS



These private label products can be found on shelves in independent mid-premium tier supermarkets in Kinshasa, 

Republic of the Congo.

SOUTH AFRICA IS NOT AFRICA



Well, obviously it is in Africa. But private label is far more developed and innovative in South Africa than anywhere else in Africa

THE PRIVATE LABEL PARADOX

HOTSPOTS

THINGS TO WATCH

✘ Brand knowledge often limited

✘ Lots of counterfeiting in some categories

✘ Status symbol limited for basic items

✘ Brand availability varies wildly

✘ Budgets are tight so the price will win



Although private label is developed and sophisticated in South Africa, market share is still low by European standards - 21%

THE 25% RULE

When Modern Grocery Retail represents 25% or more of the Total Value of Grocery, retailers can safely assume that Modern Grocery Retail is appealing to BOTH high income and middle-income consumers.

Normally, any less than 25% of the Total Value of Grocery, it tends to only be upper-income consumers shopping in a Modern Trade Supermarket. 25%+ shows that the upper income and middle-income classes are active buyers.

Which means, at 25%+ the market becomes very interesting for Private Label Manufacturers, who can target BOTH high income and middle-income consumers in Supermarkets.

Great news for Private Label brands!

Regular supermarket shoppers are less than 5% of the population in most sub-Saharan African countries


The value will remain the key growth driver for the foreseeable future. But: budget imported private label often becomes premium in the market because of markups


Watch the development of discounters  and value retailers (e.g. Supeco, Choppies, BIM)

 
Domestic supermarket players have poor supply chains – they need proactive support

➊ 

MENA’s Only Private Label & Licensing Event

29-30 October 2019
Dubai World Trade Centre

Trendtype Africa Market Intelligence

Powering decision-makers with data and insight on 50 countries in Africa

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Private label is part of a bigger trend as supermarkets become more proactive.

In this report, you will find the current outlook of the food retailers in Africa and the Private Label market penetration.


Keep reading to find out opportunities in Africa.

At Private Label & Licensing Middle East a full-day Summit programme has been introduced to give you valuable insights on what is accelerating the Private Label industry forward, thanks to changes in the retail environment. 

The Total Value of Grocery is the sum of the two core channels 

  1. Modern Grocery Retail (supermarkets, etc)
  2. Traditional Grocery Retail (traditional kiosks, etc)

Now go deeper into Private Label trends and case studies at the event Private Label & Licensing Middle East 

Now go deeper into Private Label trends and case studies at the event Private Label & Licensing Middle East

Major companies are confirming their participation, what are you waiting for to join them? 

Propel your business forward with Private Label products. 

Join the event today to start increasing your business profitability!

Find new opportunities at the ONLY private label exhibition 
in the region