Exclusive PL Buyer Survey
August 18, 2010
Consumers Plan to Stick with Private Label; Price Remains the Reason
Consumers who have been driven by the recession to purchase private label goods plan to continue buying private brands once the recession ends, according to findings of a U.S. consumer survey done in June exclusively for PL Buyer.
Asked how they would complete the sentence, “when the economic recession is over, I will be buying..,” 81 percent of the 1,100 consumers surveyed say they will be purchasing the same amount of store brands as before the recession ended. Segmenting the respondents by income, the survey finds 83 percent of those making more than $50,000 in annual income say they will be buying the same amount of private label products after the recession, while 79 percent of those making less than $50,000 say they will be buying the same amount of private label goods.
Price is the major driver of private label purchase, the PL Buyer survey finds, with 93 percent of all respondents saying they buy private label because the products are less expensive than national brand products.
“The economic recession is causing an increase in private label purchasing, a trend that our survey results show is unlikely to change after economic recovery. These insights reveal an opportunity for private label brands to profit by increasing consumer awareness and reducing concerns over product quality,” Chris Urinyi, CEO of Lightspeed Research, tells PL Buyer. Lightspeed conducted the survey exclusively for PL Buyer. The survey is sponsored by West Liberty Foods.
The survey finds 45 percent of all respondents saying they have been buying more private label goods during the recession. Analyzed by income level, the survey reports that 48 percent of those making less than $50,000 say they are buying more private label, while 42 percent of those making more than $50,000 say they are buying more private label.
But quality of private label goods remains an issue in some consumers’ minds, the survey finds. Overall, 77 percent of respondents rate the quality of private label as equal to the quality of national brand products, but 19 percent rate the quality as inferior. The percent of those rating store brands inferior rises to 22 percent among the 18- to 34-year-old demographic — not good news for retailers hoping to capture younger consumers with their offerings. Skepticism about quality drops to 16 percent with those 55 and over and 19 percent for those age 35 to 54, Lightspeed reports.
Although some retailers have began to take a tiered approach to store brands, offering premium quality lines, consumer education may be needed to better promote these offerings. The survey finds that 40 percent of respondents are aware of premium quality store brands. Broken down by gender, 38 percent of female consumers are aware of premium store brands, while 42 percent of male consumers are.
Roughly 20 percent of respondents visit a grocery store specifically because of its store brand products, with younger consumers more likely than those over 55 to visit a store specifically to buy its store brand products.
Other key findings of the survey include:
• Package design is rated as influential to their purchase decision by 30 percent of respondents, not influential by 33 percent.
• 31 percent say they have purchased organic store brand products
• The region with the highest percentage of respondents who have purchased organic store brands is the West with 44 percent, followed by the Northeast with 29 percent.
Lightspeed, Basking Ridge, N.J., maintains proprietary online consumer panels throughout the world to produce its research. Its Lightspeed Research USA online panel received this survey in June. Overall, 1,212 people responded to some part of the survey. Lightspeed offers data collection services including survey design, sample management, programming and reporting, and has offices throughout the United States, Europe and Asia Pacific. Lightspeed (www.lightspeedresearch .com) is part of Kantar.
— J.N. Frank
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