New research has shown that an increasing number of consumers prefer private labels to branded goods, with private labels claiming a record share of the grocery market in Australia.
TNS director of consumer research, Nicole Marquardt said that a purchasing mentality had emerged that was here to stay, with private label growing amongst most shopper groups, particularly adult households, young singles and young couples.
“Private label’s growth has been spurred by the economic downturn, but when we look at the motivators behind its purchase we find that few consumers are buying it in response to the recession with many there by choice,” said Marquardt.
She said that people are opting for private label for different reasons including saving money to spend on the family, the belief that brands are all hype and not of superior quality, and to display thrift by being smart selectors.
However, the research found many of the Australians who buy private label do so despite being concerned over potentially lower quality, inferior status image, poor packaging and lack of innovation of the products.
The groups of private label buyers found in the research include the committed cost cutters (12 per cent of the population); the smart selectors (24 per cent of the population); the success symbolisers (30 per cent of the population); the label lovers (11 per cent of the population); the belt tighteners (10 per cent of the population) and the brand believers (13 per cent of the population).
“We’re seeing that the majority show interest in private label regardless of the category, even in those that were traditionally resistant to the threat,” said Marquardt.
“Purchasing behaviour does not always reflect loyalty to private label, but can also be an indication that branded manufacturers have few true ‘brand believers’. The implication for retailers and manufacturers is there is no one-size-fits-all approach when it comes to private label.
“There are huge variations across category and shopper types, but when it comes down to it consumers have a new purchasing mentality that the cheaper product can be just as good,” she concluded.