• by Spencer Ball , August 28, 2012

As I’m a native Brit living in Singapore, my first sighting of Waitrose private-label tea on the shelves of my local supermarket was cause for a minor celebration.

Over the last few months, the range offered by Cold Storage (one of the city-state’s leading retail chains) has grown considerably. Dedicated displays have appeared, neatly stacked with rows of perfectly packaged Waitrose products, complete with little Union Jacks on shelf edges proclaiming “British Quality.” I feel like singing the national anthem whenever I enter the store. Clearly I’m not the only one. “It’s like being back home!” was the comment I overheard from a couple of expatriate mums.

Meanwhile across town, rival chain Fairprice Finest is peppering its shelves with the ‘365’ value label from Belgian retailer Delhaize. The no-nonsense, minimal packs with their clean white Euro aesthetic jump out of the snack category and compel you to put them in your basket. Like the packaging, the prices feel good too -- even better than the me-too equivalent offered by Fairprice’s very own private label.

Interestingly, Fairprice (as the name suggests) has a legacy of providing Singapore’s heartlanders with good value grocery. I wonder what these shoppers will make of this strange foreign-talking brand? European brands usually come with a big name and a silly price tag.

Good news for the shopper, you say. But what does Fairprice hope to gain by selling another private label alongside its own? And what’s in it for Delhaize and Waitrose, apart from just shifting a few more units abroad?

Let’s start with the customer (as any good retailer would). Surely the sales generated by a handful of homesick expatriates are not going to make a big difference to Cold Storage’s daily takings. But the cachet of carrying an exclusive, foreign brand could be the thing that lures shoppers into the store for their big weekly trolley filler. And when you consider the profile of the Singaporeans who shop at Cold Storage (upper-middle, well-travelled professionals, often educated at UK universities) it all starts to add up. They may be willing to pay national brand prices for a private brand they trust and dearly miss from their time overseas. For those shoppers who are not familiar with Waitrose, the products are presented like a leading global brand. A simple bit of point-of-sale material goes a long way to educate them about the provenance and perceived value of the brand. 

So for the host retailers, bringing in a foreign private label can neatly fill a gap in their assortment -- the price gap between their own value line and the big national brands. Or it may be a good strategy to support their own fledgling private labels -- still unproven with skeptical customers who place higher value on imported labels. In the case of Fairprice, they can use the 365 brand to protect the higher margins of their own mid-tier NBE label. It also keeps the store brand from being seen as cheap, and gives them permission to offer value alternatives in categories where they have less expertise.

And for the exporter retailers, they get the opportunity to build their brands in markets where they have no footprint (yet!). Given their investment in product innovation and eye-catching pack design, these private-label brands are poised to take on international players with a clearly differentiated product. The recent venture brands from Tesco and brands like Duchy Originals by Waitrose have been created to go toe-to-toe with the big global players. Now they may be able to do this in someone else’s store -- not just their own.

For me, I get to drink my favorite English Breakfast Tea with a competitively priced Belgian chocolate biscuit.