Woolworths ponders Local brand: Do ‘buy Australian’ campaigns work?

Woolworths is considering launching a private label brand called ‘W Local’, the supermarket has revealed.

In a piece in Fairfax papers this morning, Woolworths confirmed it was considering the new brand, which it would roll out across its supermarket and liquor shops in a bid to play up its close relationship with Australian farmers and suppliers.

Woolworths has registered ‘Woolworths Local’ as a trademark, and bought the domain name www.woolworthslocal.com.au.

Woolworths has taken a number of steps in recent months to shore up its Australian-made credentials. Today’s revelation comes only two weeks after Woolworths closed a $3 million deal with SPC Ardmona to source its entire private label packaged fruit range from Australian plantations.

Woolworths would be hoping the new brand shifts consumer buying away from its rival Coles, as well as provide a response to category challengers Costco and Aldi, which offer cheaper prices but are foreign owned.

The news is good for farmers and other suppliers, who may find they don’t have to compete as vigorously with imported food when it comes to getting on supermarket shelves.

Woolworths is a far cry from the first company to promote its Australian credentials. But do these ‘buy Australian’ campaigns actually work?

The rise of online shopping, often at foreign outlets, suggests price and convenience are a bigger pull for consumers than patriotism.

This is backed up by academic research, which consistently shows product price and quality are more important than country of origin in influencing buying decisions.

Brand Intellect founder and managing director Simon Rowell told SmartCompany that the popularity of buy Australian campaigns tends to rise and fall with recent events.

“Say an overseas conglomerate comes and buys a classic Australian brand, like what happened with Vegemite or Fosters. That causes a short-term awareness of what is and isn’t a locally owned and produced brand, and people do think more about their purchasing behaviour for a period.”

When it comes to food, people are often more conscious of country of origin than for other products, he adds.

“If Woolworths puts significant effort into pushing why they’re actually promoting food, it can work to shift behaviour. However, it very much depends on what Coles does in response. Often these initiatives get equalled out in the end.”

Rowell doubts Woolworths would be able to successfully charge more for a local brand. “In the research, people say they’re willing to pay more for local.

“But when push comes to shove, it rarely bares out. People are very price-conscious nowadays. So this offering would have to be priced pretty similarly to the rest of the range.”