Continued growth for store brands says PLMA consumer study

A new nationwide study in the USA reveals that more than eight out of ten supermarket shoppers see no improvement in the economy, and forty percent believe the situation has worsened.

As consumers continue to cope, the study affirms, the appeal of store brand products is stronger than ever and may even be intensifying.

The findings are based on a poll of nearly 800 main household grocery shoppers conducted in February 2010 by GfK Custom Research North America for the Private Label Manufacturers Association, based in New York.  The report, entitled ‘Recession, Recovery and Store Brands: What Consumers Are Saying Now’, can be downloaded here.

Among the study highlights:

For most American shoppers, the recovery has yet to begin.
Asked whether the economy has changed over the past few months, 40 percent said conditions were worse, while another 42 percent said things have stayed the same.  Fewer than one in five felt the economy had improved.

As a result, the recent surge in store brands sales is likely to continue.
When asked how important economic conditions were in deciding to buy a supermarket store brand, four in ten responded ‘very important’. A solid majority of consumers – more than six in ten – said they plan on buying more private label as they attempt to stretch their food dollars. Another finding that may also accrue to store brands’ benefit: Half of shoppers intend to spend less money on groceries in the months ahead.

Consumer awareness of store brands is also rising.
More than half of respondents said they are more aware of store brand products now than they were a year ago.

Shoppers who identify themselves as ‘frequent’ buyers of store brands are at an all-time high.
Some 57 percent say they buy private label products frequently, a figure that has been increasing (it was under 55 percent a year ago).

A greater number of shoppers are switching to store brands in product categories where they had previously only purchased a national brand.
Some 43 percent report they have recently forsaken a familiar national brand for a private label counterpart, a marked increase since the June 2009 when only 35 percent said they had done so.

Virtually all of the shoppers who switched are pleased with their decision.
Ninety-seven percent compared store brands favorably to their previous national brand choices in the same categories. About half said that their store brand selections compare ‘very favorably’, a dramatic increase from the June 2009 study when only one quarter reported the same.

Study participants endorsed a variety of strategies to cope with what they see as a persistently difficult economy. When asked how they think the economy will impact their supermarket shopping habits, more than two thirds said they will take advantage of discounts by buying larger sizes or quantities for items they regularly purchase; two thirds will look for more coupons and promotions on national brands. About a third plan to change the stores or types of stores where they do their primary grocery shopping.

PLMA commissioned GfK to monitor consumer attitudes and behavior toward store brands in the US as private label sales and market shares across all retail channels began to surge about two years ago. Sales of store brand products topped USD $86.4 across the major US retail channels over the past year, according to the latest data compiled by The Nielsen Company for PLMA. In supermarkets alone, where market share in units reached an historic high of 23.7 percent, store brands growth outpaced national brands by a spread of 8 basis points and dollar market share also set a new record at 18 percent. Store brands accounted for 90 percent of the sales growth in supermarkets, adding USD $1.5 billion in incremental sales (+2.9 percent), while national brand sales were virtually flat for the year at +0.1 percent.

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