White Brands Raise Prices 8% More Than Manufacturers

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Private labels have raised their prices up to the middle of April by 8% more than those of manufacturers, specifically, 18% compared to 10%, according to Gelt, a consumer purchasing data platform in Spain.

The price escalation that has made the shopping basket in Spain significantly more expensive since the beginning of the year, sponsored by the costs of logistics, transport and fuel, has not been homogeneous in the world of brands. While the manufacturer or commercial brands took the initiative in passing on these increases to their final sale price, the white or distributor brands reacted more slowly .

However, this trend was broken at the beginning of this month of April and while the former have slowed down their increases, the latter continue to increase .

Manufacturer brands began to raise prices in January. Through March, they had risen an average of 18%. The commercial products with the highest increases were: flour (28%); oil (19%); rice (12%) ; canned tuna and toilet paper (10%); and milk (7%).

For their part, white brands had an average increase of 7% with very different behaviors: very powerful increases in oil (35%) and canned tuna (17%) but also decreases such as flour (-3%) .

The trend, however, has been reversed in April and during the first two weeks the prices of commercial brands have slowed down and have fallen by 8%. In particular, toilet paper (-8%) and flour (-1%) have led the declines while other products continue to rise, but at a slower rate. For their part, distribution brands, always more volatile, have risen 11% so far this month .

The global calculation of price increases from January to mid-April is 10% in the case of manufacturer brands, compared to 18% for white brands.

José Luis Varela, Global Head of Data at Gelt, explains that: “the balance of costs and competitiveness is very delicate in all sectors, but much more so in this one. The data convincingly reflects how brands have had to transfer the rise of costs to the final sale prices. ”

He adds that “they have done it very differently between commercial and distributor companies, which clearly gained market share due to the adjustments in expenses that, in turn, consumers had to make. And that has motivated the correction of April Brands are aware that customer loyalty is volatile , that price is a substantial element of the purchase decision, especially in times of crisis, and this implies a high risk in future purchases”.

Gelt is a free downloadable app that offers users cash when they include the products that are in their promotions in their shopping list. Users only have to download the application -available on both iOS and Android-; check, each time they make a purchase, which products offer promotion; and send the supporting ticket through the app. Purchase incentives – set by the brands themselves – are charged directly in cash through the ATM network.

It has three million households spread throughout Spain and who buy in supermarkets of all brands, with which it has unique information to gauge the state of mass consumption in our country. Leading brands in the market such as Coca-cola , Pepsi , Nestlé , Danone, Kellogs, Pringels, Nescafé, Litoral, Burgo de Arias, Nesquik, Actimel, Danacol, El Ventero, Tomates Solís, Damm Beers, among others, promote their products through the Gelt app .

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