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Wary Consumers Still Turning to PL, Survey Says

June 14, 2011
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Nearly 45 percent of consumers say the weakened state of the economy and a 4 percent increase in food costs this year have motivated them to buy more private label items, states a recent survey by AlixPartners, a New York, N.Y.-based business advisory firm.

 

“The American consumer is staunchly committed to value and is more open to private-label and other less-expensive food products than ever before,” said David Garfield, managing director and head of AlixPartners’ consumer products practice. “The food industry is seeing a heated battle for market share and our survey shows it will continue as more consumers are up for grabs.”

More than 60% of those polled said price is the most important factor in their grocery shopping decision-making.

 

 “I think store brands have demonstrated themselves to be of equal quality,” comments Paula Rosenblum, managing partner for Retail Systems Research.

 

Consumer trade downs from national brands to private label during the Great Recession helped retailers demonstrate their ability to deliver equal or better quality for a lower cost in all food categories. The trade downs resulted in larger pools of loyal private label customers.

 

The continued growth and stability of private label, however, still depend on a retailer's ability to continue to deliver in terms of price and quality. Of the 1,000 participants surveyed by AlixPartners, 40 percent cited questionable quality as the primary reason for choosing a national brand over a private label brand.

 

The survey was conducted from April 7 – 11, 2011, with 1,000 U.S. participants. Participants were asked to provide feedback based on the current state of the economy, their decision-making processes, the importance of private label assortments, preference for private label and private label buying history.

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