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Shoppers Understand Private Label's Value, Less Sure About "Value Plus"

October 11, 2010
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The battle for consumer hearts and minds is over. A full 91 percent of more than 2,000 respondents to a recent Lightspeed Research study say they buy private label goods. But the struggle continues: only four out of 10 respondents are aware of premium-quality store brand products.
 
The research was done exclusively for Private Label Buyer magazine. Full results will be published in the magazine’s November issue and will be available online at PrivateLabelBuyer.com.
 

The study confirms the tremendous progress grocery retailers have made, demonstrating to consumers that, amidst a severe economic downturn, they can save money without sacrificing perceived quality.

Price is the main reason almost all respondents buy store brand products, with little difference across age, gender or income demographics. Nearly 80 percent of respondents think that store brand products are equal in quality to name brand products.
 
The longer-term question of whether  consumers will continue buying private label after the economic downturn ends is, at the moment, moot, as 73 percent of those surveyed believe the recession, which has officially been declared over, will persist two more years. More than 30 percent of those with household incomes less than $50,000 believe it will continue four more years.  
 
In the next phase of private label growth, consumers will come to terms with retailers’ tiered private label strategies of offering “value,” “value-plus,” and “premium” product lines. The danger, of course, is that proliferation of private label product lines will confuse shoppers with “too many choices.”
 
Single-digit percentage differences separated groups in their awareness of premium-quality store brand products, with those over 55 years of age having the least awareness, 36 percent, and those 18 to 34 years of age having the highest awareness, at 43 percent.
 
As this new front in the private label saga opens, retailers are rebranding their private label products and redesigning packaging to emphasize continuity and simplicity.
 

For full results of the Lightspeed Research Private Label Buyer study see the November issue of the magazine.

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