Finest currently has annual sales of £2bn. Speaking to the Financial Times, Ken Murphy said: “We haven’t yet set our stall out to say ‘what would it take to get to £3bn’, but we’re very conscious it is playing an increasingly important role.”
He added: “We genuinely believe . . . that our intrinsic [food] qualities are every bit as good as anything you would get at Sainsbury’s and increasingly out of Waitrose … M&S, we probably still have a bit of work to do.”
The report notes that in the face of higher living costs, shoppers are shunning restaurants and becoming more adventurous with their cooking at home.
Data from Kantar shows that spending on premium own-label lines in the leading UK supermarkets rose 12% in the year to 9 June even as inflation eased. The figure was also nearly double the 6.9% growth in all brands owned by the grocers, including their budget ranges.
The FT highlighted that Tesco’s Finest products account for only over 3% of the group’s £61.4bn sales, although this is equivalent to about a quarter of Waitrose’s total sales and M&S’s food sales, respectively.
However, it has taken Tesco about a decade to reach the £2bn level from £1.4bn in sales in 2013. Murphy did not reveal whether there was a target date set for getting sales to £3bn, but Clive Black, a retail analyst at Shore Capital, told the FT that it would not be earlier than “the medium and long term before that number is reached” given that the industry’s annual growth is relatively modest.
NamNews Implications:
- ‘Shoppers are shunning restaurants and becoming more adventurous with their cooking at home…’
- …heightening consumer awareness of the difference made by quality ingredients…
- …and the home-cost of ingredients vs the price paid in hospitality.
- All potential threats to ‘eating out’ long term.
- Apart from increased savviness re branded equivalents in store.
- One to watch…
#OwnLabel #Hospitality
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