Discount to combat private label, market researcher tells brands

By staff reporter

- Last updated on GMT

Brand owners should offer incentives to woo consumer back from private labels, say market researchers, as shoppers indicate they will not revert to name brands after the recession.

In the tough economy consumers have been adapting their grocery habits to make their budget go further. Numerous market research surveys have indicated that the private label industry is undergoing growth. Last month IRI Times & Trends said that​private label unit share has grown 12 points to 22.8 percent over the past 12 months, while dollar share has grown 0.7 points to 17.6 percent.

Now another survey, from the Integer Group and M/A/R/C Research, found that almost 8 in 10 consumers are hunting out products that are on sale and are comparing prices between name brands and store brands.

Only 37 per cent said they thought name brands are more reliable, and 39 per cent said they believe them to be better quality products. On the other hand, 84 per cent of respondents said they thought name brands are more expensive.

“With this many shoppers doing price-comparison, name brands need to act now in order to keep consumer – and beyond the recession, entice customers to return,”​ said Craig Elston, Integer’s senior vice president.

Integer and M/A/R/C suggest two actions for wooing consumers back: consistently “delivering on brand promise”​; and offering financial rewards like coupons and discounts.

Some very established name brands were seen to be on safer ground than others, however. For instance, Kraft and Coca Cola are amongst those that consumers are least likely to move away from in favor of store brand goods.

The data behind the advice is drawn from the researchers’ new report, The Checkout. This asked consumers about their shopping attitudes, such as why they chose certain products and stores, and what makes them leave a store empty handed.

In their statement of the findings, the companies did not reveal how many consumers they asked, the format or delivery of questionnaire, and how the consumers were selected. The data do, however, cover a broad range of consumer goods including beverages, foods, packaged goods, telecoms, home and shelter and power sports.

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