Consumers have increasingly turned away from national brands towards private label, or store brands, as they have begun to feel the effects of the economic downturn. This latest survey, carried out in June, suggests that shoppers are sufficiently impressed by their quality to keep buying them.
The poll, which was conducted by GfK Custom Research North America for the Private Label Manufacturers Association (PLMA), showed that 35 percent of consumers are trying private label products for the first time in categories where they once only bought national brands – and 94 percent said the store brand products compared favorably.
“This positive experience makes shoppers eager for an even greater assortment of store brand products from which to choose,” said the PLMA.
Quality for loyalty
The survey results add to a burgeoning body of evidence from market research organizations indicating the importance of quality in developing consumer loyalty to store brands.
A host of earlier market research from The Nielsen Company, NPD Group, Brandweek and The Hartman Group, has pointed to a consumer quest for value in times of economic downturn, but the organizations are agreed that value encompasses more than price alone.
Although the PLMA said that “the recession continues to influence shoppers’ decisions on store brands”, with 74 percent of respondents saying it is an important factor in their decision making, the organization has said that quality is key to sustaining private label growth.
Previous recessions
In the 2001-2003 recession, private label’s unit market share climbed from 20 percent to 21.8 percent, according to the PLMA. Likewise, in the 1990-1991 recession, unit share for retailer brands moved up from 17.6 percent to 20 percent. And consumers tended to stick with private label even after the economy recovered.
However, the results were quite different in the 1980-1982 recession. Private label market share climbed rapidly during that period, as retailers introduced many budget-priced ‘generic’ product lines with basic black and white packaging and low-quality ingredients. But these gains were short-lived, as shoppers were disappointed with quality and soon switched back to their favorite national brands, the PLMA said.
Private label products account for more than $81bn in the US, with health and wellness claims including no trans fats, no saturated fats, multi-grains and antioxidants among the strongest-growing categories.