Shufersal's Private Label Coffee: Cheaper Than Competitors?
Translated & summarized from Walla by baba
A price comparison of coffee products in Israel reveals that Shufersal's private label coffee is not consistently cheaper than competitors, despite appearing so on its own shelves. While the private label offers savings of up to 60% within Shufersal Deal stores, this is partly due to higher prices on branded goods within the chain. When compared to rival supermarkets like Rami Levy and Yohananof, Shufersal's private label coffee is often more expensive, with savings diminishing significantly or disappearing entirely for some products. Consumers are advised to compare prices per 100 grams for accurate savings.
The story in 6 lines · by baba
- Shufersal's private label coffee appears cheaper within its stores due to higher branded prices, not just lower private label costs.
- Savings on Shufersal's private label coffee range from 11.6% to 60.1% internally, but drop to 22.5% against the cheapest market prices.
- Compared to Rami Levy and Yohananof, Shufersal Deal is often more expensive for branded coffee products.
- True savings on Shufersal's private label are mainly in premium coffee categories.
- Consumers may find branded coffee cheaper than Shufersal's private label when comparing across different supermarket chains.
- The article recommends comparing coffee prices per 100 grams for accurate savings.
Shufersal's strategy to expand its private label offerings, including coffee, aims to increase control over shelf products and reduce reliance on major manufacturers and suppliers who have historically dictated prices and shelf space. While this strategy strengthens Shufersal's bargaining power and gross profit margins, a price comparison reveals a more complex picture for consumers.
Within Shufersal's own "Deal" stores, the private label coffee is, on average, 31.9% cheaper than well-known brands, with the price difference ranging from 11.6% to 60.1% depending on the specific coffee category. However, when compared to the cheapest prices available in the market, the savings drop to just 22.5%. Approximately 30% of the perceived savings on Shufersal's shelves stems from higher pricing of branded products within Shufersal itself, rather than a significant discount on its private label.
Competition among rival supermarket chains shows substantial price gaps. A basket of nine branded coffee products costs NIS 290.30 at Shufersal Deal, compared to NIS 259.63 at Rami Levy, an 11.8% difference. In some cases, Shufersal Deal is more expensive than its competitors. For a basket of seven tested products across three chains, Shufersal Deal was not cheaper than competitors for any of the nine brands, matching them at best and being more expensive by 4% to 61.5% in five instances. Overall, Shufersal Deal was 11.8% more expensive than Yohananof and 13.6% more expensive than Rami Levy for the tested basket.
The true savings on Shufersal's private label coffee are mainly found in premium products, where it is 33% to 59% cheaper than comparable branded items, even against the lowest market prices. However, for basic instant and Turkish coffee, consumers comparing across chains might find branded options at similar or even lower prices than Shufersal's private label. The article advises consumers to compare prices per 100 grams for accurate savings, as the perceived savings on Shufersal's shelves can be misleading due to the higher pricing of competing brands within the same chain.
The study, conducted by the Institute for Retail Research using Pricez.co.il data, compared shelf prices at Shufersal Deal, Rami Levy, and Yohananof, normalized to price per 100 grams or capsule. The data reflects a snapshot in time, and competitor prices may include promotions. Product comparisons involved some adjustments, such as comparing granulated coffee to freeze-dried instant coffee, and different roast levels of coffee beans.
