Branded suppliers were left reeling this week in UK as Tesco and Sainsbury’s both launched concerted campaigns promoting their own-label ranges at the expense of brands.

Sainsbury’s announced a massive Switch & Save campaign, across all media, that will encourage shoppers to buy the retailer’s 15,000 own labels; while the Tesco website, Tesco.com, now flags up a cheaper alternative, usually own-label, when shoppers select a brand. Tesco’s initiative is backed by TV ads showing brands being replaced by cheaper alternatives.

Branded suppliers have reacted angrily to the initiatives, suggesting retailers were deliberately trying to damage brands. The CEO of one leading brand said the push showed the multiples were in trouble. “We are doing well. Evidently they aren’t,” he said. “It says more about them than it does about us.”

Another supplier said he was worried his business would suffer. “I see this as a deliberate attempt to damage my business by promoting competitors. I thought we had been singled out as some form of punishment for not toeing the line,” he said. “We were not told Tesco were doing this: we found out by accident because we check the retail price every day. I’m not happy. Of course it will damage sales.”

A Tesco spokeswoman said the new web feature was just part of its efforts to improve online shopping. “This feature just lets customers do what they can do in our stores – see what’s on offer,” she said. 
A Sainsbury’s spokeswoman said: “Our customers can make significant savings by switching from a brand to any of our own-label products.”

Source: The Grocer, read full story here