Aggressive price promotions in the branded general-purpose battery sector have not only worked to deflate the value of the branded market, they are also putting pressure on own labels, which remain static in terms of penetration at 22.6% [TNS 2004].
Although Morrisons says its own-label range, supported by multibuys, continues to perform strongly against its branded counterparts, the Co-operative Group, for one, is not interested in entering with an own-label range.
As Michelle Wilkinson, category buyer, says: “When customers invest large sums of money on expensive gadgets, they prefer to put their trust in a branded battery.”
The market in the UK is dominated by two brands, which between them account for 48% of market value [TNS 52 w/e May 22, 2005].
Duracell, which is owned by Gillette, holds a 33% share but over the past year has faced aggressive competition from Energizer and particularly its Energizer Ultimate range, which TNS reports has made
important share gains on the Duracell Ultra M3 battery.
Panasonic, the number three player, holds a 10-16% share.
Despite the dominance of the big US players, the batteries market is still considered a relatively easy one to enter, given the small number of core lines needed.
And Panasonic and others such as Sony believe their presence in the appliance market brings important advantages.
As Panasonic’s Tim Clark says: “Being an established appliance manufacturer is a huge advantage as we know what products are coming out and can anticipate what batteries consumers are going to need. But Duracell and Energizer are very marketing driven and spend a lot of money to maintain their brand names.”
Portable lighting firm Pifco has also noted the opportunities and this year, is supported the repackaging of its Optimax Plus (alkaline) batteries with trade press advertising, and point of sale
material. The company is also promising to launch other battery types as its range becomes established.
As Stephen Freer, Pifco national accounts manager, says: “We are targeting the other minor brands sector outside the two brand leaders within the next 12 months, and are committed to high volume and value targets.
“The strong awareness of the brand within the portable lighting sector is a natural progression for the brand into batteries.”