Increased consumer appreciation of private label foretells future growth
Europeans will never shop the same for groceries, asserts a new study from the PLMA International Council, which says the pandemic brought significant changes in how consumers purchase food and non-food products for their household and that many of the most important changes are enduring.
Among its top findings, private label is more popular now than ever, as measured by consumers’ purchase of the products as well as how they compare them so favourably to manufacturers brands.
Nearly three of ten said they are buying “more” own brands now compared to the amount they purchased before the pandemic. Importantly, the youngest participants in the survey – Gen Z and millennials – increased their own label buying the greatest among age groups.
Prospects for growth also look good. Four in ten overall said that, over the next two years, they expect to buy “more” own brands than they do now.
“The purpose of the study, ‘Will Europeans Ever Shop the Same? Assessing consumers’ post-pandemic behaviour,’ is to provide retailers and their own brand suppliers with the latest insights on European consumers so they can cooperatively develop a road map for private label development and marketing in the post-pandemic environment,” explained Peggy Davies, PLMA president, in announcing the results to PLMA International members and retailers.
The online survey collected responses to more than fifty questions from 6,500 participants spread equally across eight countries — France, Germany, Italy, the Netherlands, Poland, Spain, Sweden and the United Kingdom. It was conducted in April 2022 exclusively for PLMA International Council by Surveylab, a leader in customised online research. Each respondent self-identified as the primary grocery shopper for their household.
It revealed that own brands constitute a big portion of consumers’ regular shopping baskets. Three of ten said when they buy groceries, more than half of their basket is comprised of own brand products. An equal number said one-third to half of their regular order is made up of own brands.
In addition, it is clear that own brands have become “brands” in most consumers’ minds. When asked to compare private label with manufacturers’ brands, 60% considered the products equal, while 20% looked at own brands “more” favourably than they did manufacturers brands.
Compared to how they felt before the pandemic, 17% expressed “more” confidence now in the quality, value, and performance of own brands.
When asked to rate own brands in specific product categories, 51% said they were “very confident” in own brands in toilet/kitchen paper, 47% in fresh products, 43% in shelf-stable food and cleaning products, 42% in frozen food, 40% in beverages, 31% in ready meals, and 27% in cosmetics.
Also accruing to the future benefit of private label, more than half said the “price” of products is “more” important to them now than it was before the pandemic.
For retailers, there’s ample opportunity at the point of purchase to persuade a shopper to opt for private label. When looking for a particular product, most take their time: 66% compare prices and seek a bargain, 39% look for other brands of the product that are available, 26% examine the packaging of other brands and 19% look for innovation. A minority are decisive: without hesitation, 20% select the supermarket’s own brand and 17% choose the national brand.
PLMA International Council conducted its annual “World of Private Label” trade show on 31 May and 1 June, at the RAI Exhibition Centre in Amsterdam. It was an overwhelming success which featured 2.500 exhibitors from 70 countries and attracted more than 15,000 buyers and visitors from 122 countries.
The association’s next show will be in Chicago, November 13-15. Themed “Consumers Are Back in Charge,” it is expected to attract thousands of visitors from supermarkets, supercentres, wholesale clubs, drug chains, mass merchandisers, specialty chains, dollar stores, e-commerce retailers, importers, exporters, and distributors, among other buyers.
Store brands are a big market in the US. Total sales last year were a record $200 billion, accounting for one of every five products sold across all retail channels. Growth is continuing. For the first half of 2022, private label sales are up 8.6% vs a year ago, reports IRI.
