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Last month, supermarket chain Loblaws officially launched Black Label, its new “affordable luxury” line of President’s Choice products. With No Name and President’s Choice successfully implemented, Loblaws is attempting to fill a gap in their offerings: they aim to win over customers who may buy the majority of their groceries at Loblaws but then head over to a gourmet food store for their indulgences. However, with consumers increasingly conscious of every dollar spent, can President’s Choice get people to pay for luxury?

Referring to Porter’s 5 Forces, it seems as though Loblaws is treading in risky waters. Firstly, in Canada’s intensely competitive market for groceries, the threat of substitutes is high; Loblaws will need to contend chains such as Walmart and Sobey’s in convincing consumers to buy into their brand. Accordingly, buyer power will also be high as consumers have much variety to choose from. Because Loblaws is focussing on offering unique, high quality foods, supplier power will also be high: for example, their cherry shiraz wine is supplied solely by a small Israeli winery. Overall, the rivalry will be tough.

But Loblaws has hope. President’s Choice is an already well-established brand in Canada. Even frugal shoppers treat themselves on small luxuries, and the company is hoping that Black Label will be unique enough to lure consumers.

Works Cited:

Beer, Jeff. “An Even Better Choice?.” Canadian Business. N.p., 5 Oct. 2011. Web. 10 Oct. 2011. <www.canadianbusiness.com/article/48828–an-even-better-choice–page1>.