Australia, insurance, car, home, live, holidays

Officeworks managing director Sarah Hunter is seeing a shift towards private-label products.

“We’re seeing more and more families struggle with the cost of getting their children back to school,” she said.

“What they[customers] are purchasing is tending to be around the private-label type product or the entry point type product.”

Sales of the Studymate,Keji and J.Burrows brands,all owned by Officeworks,are growing at “three times the rate” of other brands.

“[Customers] can still buy what they need,but they’re just choosing to spend it on products that are better value,” Hunter said. “On average,we are seeing our private-label products materially out-trade national brands from a growth perspective.”

Hunter says private-label brands also enable Officeworks to sell sustainable products with recycled components “at the same price as … plastic ones,because our customers do want to buy sustainably,but they don’t necessarily want to pay more for it”.

The Wesfarmers-owned retailer,which droverevenue 5.9 per cent higher to $3.3 billion for the 2023 financial year,is also expecting customers to take advantage of major end-of-year sales.

Research commissioned by Officeworks showed 37 per cent of shoppers plan to bring Christmas purchases forward if they see a good deal.

“We know they are looking for the best value. Linked to that,we’re expecting the cyber period with Black Friday and Cyber Monday to be the strongest cyber event that we’ve seen to date,” Hunter said.

Black Friday sales usually fall on the last Friday of November,with Cyber Monday on the following Monday. Australians are tipped to spend nearly $6.4 billion across the four-day period,according to data from the Australian Retailers Association and Roy Morgan. Seventy per cent of shoppers are likely to take advantage of the sale period,Shopify research shows.

The consumershift towards private-label products is also playing out at major supermarkets as customers swapsteak for mince and champagne for prosecco. Coles and Woolworths have expanded their Christmas range this year.

However,despite the trend of “trading down”,Hunter said customers were still spending big on high-value,frequently used tech items such as smartphones or laptops. “People will still make those investment choices because they don’t do it every day.”

The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.

License this article