In Australia, there are two large retailers who are in constant competition with each other, Coles and Woolsworth. These two retailers carry everything from condiments, to snack, to meals and recently they have been rejecting high brand name products, like Heinz, because they want to focus on lower-priced home-brands. They are trying to get their customers to choose home-brand products over brands like Heinz. Companies like Woolsworth are even trying to create demand for generic products in order to strengthen their private label products. Although these changes are helping these retailers, it's hurting brands like Heinz because they are generating less revenue due to a decrease in demand for their products. Because Woolsworth is creating more space to display their private label products, the visibility for Heinz's products is diminishing, therefore people are not demanding the product as much anymore.
My view:
Basically these retailers are preventing Heinz from marketing their products and creating more demand for the company. Now Heinz has to compete with not just brand names like Kraft or Tyson Goods, it has to fight to get more attention than private label goods in the Australian segment. Since the Australian market brings in around $1 billion/year for Heinz, this sudden decrease in demand for Heinz's products will definitely have a big impact on the company's profit. Now Heinz has to reevaluate its cost structure and close down a certain number of factories as a way to prevent the company from suffering further.
http://www.forbes.com/sites/greatspeculations/2011/09/16/heinz-gets-squeezed-down-under-collateral-damage-of-aussie-retail-battle/?partner=yahootix
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