Own label gains prominence in US

December 1, 2009

Private label products are increasing in both share and stature in the US, according to the latest report from The Checkout, published by Omnicom sister agencies, M/A/R/C Research and The Integer Group (www.ShopperCulture.com).

It found shoppers buying more store brands than last year outnumber those buying fewer by more than four to one. And, among those who are buying more, three in four say they won’t return to brands. Two exceptions are those over age 65 and those with incomes over $100,000: 64% of each group report they are buying the same amount of store brands as last year.

The report claims there are two ways for brands to keep customers: consistent delivery with a long track record (which builds trust), and financial reward (couponing and discounting).

Shoppers over 50 years old are more responsive to coupons and sales, it says. And women and those with incomes over $100,000 list ‘trust’ more often than men and those earning less.

Though two-thirds of shoppers believe brands offer more novelty and innovation, less than half believe they also offer better or more reliable products. African-American consumers believe in the higher quality and reliability of brands more than other ethnic groups. Most shoppers (84%) report brands cost more than store brands.

The Checkout reports shoppers are looking for deals and are frequently assessing the price gaps among brands, store brands and products on sale. More than eight in 10 shoppers report seeking products on sale or comparing prices between brands and store brands when buying groceries or household goods.

Only about one in four report just buying what they want without hesitation. Those earning less than $25,000 and those aged 18–24 are more likely to go straight to the store brands, the report says. They also get information from friends and store associates before choosing.

Kroger, Wal-Mart and Target are perceived as carrying some of the best store brands, according to researchers. Specific brands mentioned frequently include Wal-Mart’s Great Value and Equate, Kirkland (Costco), Archer Farms (Target), and 365 (Whole Foods).

The name brands shoppers are least likely to trade out of include Kraft, Coca-Cola, and Tide.

In terms of buying behavior, the pattern for July closely resembles June, with more than half (54%) buying fewer or cheaper items, says the report. Women continue to account for the largest portion of shoppers trying to spend less. African-American and Hispanic shoppers are also more likely to report buying fewer or cheaper items than are Caucasians.

Minimising shopping trips remains the primary goal of shoppers, but not as strongly as in June. Shoppers aged 65 and over are less price-sensitive than other age groups but are more likely to value getting everything in a single trip and finding the best-quality items.

Shoppers aged 35+ focus on prior planning: they tend to use more manufacturer coupons and circulars from newspapers or in-store. Younger shoppers (18–34) want more on-demand help: they report higher usage of touch screens, associates, posters, and self-checkout.

The study found shoppers are reaching for their mobile phones more often for shopping assistance — usage increased 3% in the past month.

Consumers remain as price-focused in July as in previous months — willing to put off purchases and buy products where they are offered at the lowest price. Shoppers aged below 65 years old are more likely to seek out lower prices than those 65 and over.

The Checkout is based on a nationally representative survey of 1,200 US adults conducted monthly by M/A/R/C Research.

For more information please visit www.MARCresearch.com/thecheckout