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Système U Phases Out its Economy Line

Système U Phases Out its Economy Line
Photo: LZ Retailytics
Système U's economy line Bien Vu, alongside its standard, and children-dedicated private label lines Mat & Lou.
French co-operative Système U is to discontinue its private label economy line Bien Vu (Well Spotted), Editions Dauvers & Linéaires report. The range would be replaced with no-brand products supplied by various manufacturers. It is understood that the economy line would no longer fit with the retailer's qualitive positioning. Earlier this year, the retailer announced the removal of 90 controversial substances (including some pesticides, palm oil, hydrogenated fats) from 1,500 own-brand goods.

Système U's decision echoes a similar move from French giant Carrefour. Back in 2014, the retailer decided to phase out its Carrefour Discount line, favouring instead brand-less white packaging and manufacturer entry-price products. This has made it easier for the products to find their way on the shelves of its buying partner, Belgian retailer Louis Delhaize.

Opinion

To Brand or Not to Brand

To brand or not to brand? That is the question for grocers who feel compelled to offer an economy-priced private label line. The answer seems obvious: If you want to be perceived as a price aggressive brand, do it – if you don’t, leave it. (But if you do, make sure the quality is right!). Indeed, as a traditional, co-operative supermarket operator, Système U doesn’t exactly target penny pinchers. For that, its Bien Vu line seemed too attractively designed.

The products are most definitively not prominently featured on the retailer's shelves. Having a dedicated, attractive economy line was too much effort spent on something an added value-orientated retailer has never really wanted to promote. Now that the discounters in France (primarily Lidl) are working on ‘supermarketisation’, the need to have its own discount line has become less urgent. Which also means: product quality no longer needs to match that of the discounters’ ranges, but can now fully be orientated on the lowest possible price in the market.

After all, a supermarket still needs an entry price level with the only purpose to make it shine, at least stand, in public price comparisons. A hotchpotch of C-brand and no-brand products is enough for that. These ranges don’t have to be attractive - they shouldn't be too attractive! - they just have to be there. On the buying side, the advantage is obvious: The retailer orders goods whenever needed and from wherever possible.

Interestingly, Système U’s move comes shortly after the creation of the Alliance buying group together with Auchan which has similar unknown brands as entry-price ranges in its discount corners. Last but not least, the un-branding of the economy line allows Système U to stick to its clean label commitment, after it said earlier this year it would ban controversial ingredients from its own brands (but not manufacturer brands).

So, less complexity in assortment and buying, with limited or no impact on the brand and price perception. Sounds like a reasonable decision!

With contributions from Senior Retail Analyst Gildas Aïtamer.
Topics: Système U