Seeing No Recession Relief Yet, Shoppers Opt for Private Label: Study

Despite reports that the recession is lifting, most consumers are still having a tough time coping with costs. A nationwide study recently conducted by GfK Custom Research North America for the Private Label Manufacturers Association (PLMA) has found that more than eight out of 10 supermarket shoppers see no improvement in the economy, and 40 percent actually think conditions are even worse now. As consumers continue to cut back on expenses, purchasing store-brand products has become one of their chief strategies, and the popularity of such items seem set to rise according to “Recession, Recovery and Store Brands.”

Additional highlights of the study include the following:

—When asked how important economic conditions were in deciding to buy a supermarket store brand, four in 10 respondents said they were “very important.” More than six in 10 responded that they plan to purchase more private label products to stretch their food dollars. Additionally, half of shoppers polled intend to spend less money on groceries in the months ahead
—Over half of respondents said they are more aware of store brand products now than they were last year
—Fifty-seven percent of shoppers surveyed said they buy private label products frequently, a figure that has been on the rise (just last year, it was under 55 percent).
—Forty-three percent reported that they’ve recently switched from a familiar national brand to a private label counterpart, a significant jump since June 2009, when only 35 percent said they had done so
—Ninety-seven percent of respondents compared store brands favorably with their previous national-brand picks in the same categories. Around half said that their store-brand selections compare “very favorably,” a dramatic rise from the June 2009 study, when just one-quarter held that opinion

When asked how they think the economy will affect their supermarket shopping habits, over two-thirds of study participants said they will take advantage of discounts by buying larger sizes or quantities of items they regularly purchase, while two-thirds will seek more coupons and promotions on national brands, and about one-third plan to change the stores or types of stores where they carry out their primary grocery shopping.

New York-based PLMA commissioned GfK to monitor consumer attitudes and behavior regarding store brands in the United States as private label sales and market shares across all retail channels began skyrocketing about two years ago. Sales of store brand products topped $86.4 across the major U.S. 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 all-time high of 23.7 percent, store-brand growth surpassed national brands by a spread of eight basis points, and dollar market share also set a new record, at 18 percent. Store brands made up 90 percent of the sales growth in supermarkets, adding $1.5 billion in incremental sales (2.9 percent), while national brand sales were essentially flat for the year, at 0.1 percent.

The findings of “Recession, Recovery and Store Brands” are based on a poll of almost 800 main household grocery shoppers conducted in February 2010. This survey updates findings from two earlier PLMA studies on “Store Brands and the Recession,” which were published in February 2009 and in June 2009. New York-based GfK Custom Research North America is part of the GfK Group, the world’s fourth-largest market research company.

“Recession, Recovery and Store Brands” is available for download in full at
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