Finding the right balance for private label

Under the heading "Private label - why? And how?", the virtual Global DIY Summit took up a controversial topic in the industry. Francisco Torres, executive vice-president of merchandising and marketing at Chilean market leader Sodimac, answered questions from global consultant Jim Inglis. After all, private label products account for 30 per cent of Sodimac's turnover and 40 per cent of its profits. However, Torres warned against using too many private labels. Sodimac currently works with 26 private labels. Each product category and each country had to be seen separately, because "for every brand you need to do the communication". He considered 30 to 35 per cent to be a sensible own-brand share. Consumers also expected to see the introduced industrial brands. "What is critical is to understand your customers' needs," Torres stressed. Sodimac buys most of its private-label products in China, but is trying to diversify "wherever that is possible". About 30 per cent are sourced from local suppliers.