- RESEARCH & AWARDS
- CATEGORY REVIEWS
It's the question on every retailer's lips: Will consumers who switched to lower-priced store brands during the recession continue to buy them even after the economy improves? The answer, according to a new survey commissioned by the Private Label Manufacturers Association (PLMA), New York, is an emphatic, “Yes!”
Though three-quarters of consumers surveyed earlier this month by New York-based GfK Custom Research North America agreed that the recession is one of the most important factors shaping their shopping behavior, a whopping 91 percent said they expect to continue buying store brands even after the recession ends. Why?
According to the survey, 90 percent of consumers said the private label products they buy are just as good as national brands. As a result, more than a third reported trying store brands in categories where they had purchased only national brands in the past. Of those, 94 percent said the store brand alternative compared favorably to their previous national brand choices.
The poll also revealed that nearly a third of shoppers surveyed are buying more store brand products today than they were a year ago. The number of consumers who said they buy private labels "frequently" also increased - from 55 percent earlier this year to 57 percent today. And 60 percent of consumers polled said they'd like to see their supermarket carry more store brand products.
According to PLMA president Brian Sharoff, the results suggest consumer behavior post-recession is likely to mirror that displayed after the 1990-1991 and 2000-2001 recessions, when store brands were able to maintain share gains accumulated when the economy soured. This time, however, the recession was more severe, and the private label gains, more significant, leading some analysts to predict a turnaround - or at least a "leveling off" - once the recession ends.
No one knows exactly how consumers will react to an improvement in the economy, Sharoff told PL Buyer, but he's betting the private label gains will hold. Not only are profit-challenged retailers focusing more attention than ever on higher-margin store brands, "but the retail landscape itself has changed in ways that support private label growth, ways that have nothing to do with the recession," he explains, citing the growth of non-traditional store brand-centric retailers like ALDI, Trader Joe's and Costco.
Sharoff's comments mirror those of Harvey Hartman, who, in a recent issue of HartBeat, an online newsletter produced by The Hartman Group, Bellevue, Wash., decried the media's tendency to link increasing private label sales to the recession, ignoring a myriad of other factors driving store brand growth, particularly the actions of retailers.
"To be sure," he writes, "the recession has likely had an effect on private label sales at some level..." However, "It would seem patently absurd to make aggregate level pronouncements on the consumer's interest - or lack thereof - in private label without considering the retail side of the equation." - D. Leathers