Research: Mid-Tier Brands Getting Squeezed

Press enter to search
Close search
Open Menu

Research: Mid-Tier Brands Getting Squeezed

By Allison Shafir - 06/04/2009
It’s not a good time to be a mid-tier brand, according to the IRI Times and Trends report entitled “The Value/Premium Dichotomy.” While some shoppers are flocking to value brands, others are still paying top dollar for premium products despite the economy.

Unit sales of mid-tier brands sagged 3 percent for the 52 weeks ended March 29, compared to the year prior. Value brands grew 2 percent, while premium brands slipped a little more than 1 percent.

“Shoppers have moved away from their traditional brands to value brands, including both retailers’ private brands as well as economy brands from national brand manufacturers,” said Thom Blischok, president of IRI Consulting and Innovation, in a statement.

Still, they are holding onto premium brands, through what Chicago-based IRI describes as “sophisticated splurging.” The difference is they are purchasing them at value stores such as Walmart, supercenters and discount retailers.

Those described as “living comfortably” have increased premium brand spending 2.4 percent. Consumers who are “doing well” -- single-member households earning more than $35,000 annually and two-or-more-member households earning $55,000 -- are spending 1.4 percent less on premium items.

Health and wellness trumps value according to the survey. While bottled water unit sales fell 3 percent over the last year, premium bottled water unit sales surged 11 percent, thanks in large part to enhanced waters like Glaceau Vitaminwater. Premium yogurt sales spiked 34 percent, while regular yogurt sales were roughly flat.

Blischok said, “These findings remind us that shoppers often act in unpredictable ways.”