Only 19% Think National Brands Are Worth The Money


Don't expect consumers' love affair with private-label products -- whether it's the premium Archer Farms from Target, the new Health Starts Here products from Whole Foods Market, or the soon-to-be-reformulated Great Value line from Walmart -- to go away anytime soon.

New research from Mintel says that concerted efforts retailers have made to improve store brands -- including offering several tiers of "generics" -- has paid off, with 44% of grocery store customers saying they believe store brand products are better today than they were five years ago. And just 19% say it's worth paying more for name-brand products. Some 34% in the survey say they don't feel like they are sacrificing anything by buying these store-branded goods.

The commitment to private-label varies by category: In dairy products, 62% believe there's no difference in quality between name and store brand; 61% in canned or shelf-stable food products, and 56% in household cleaners. The two exceptions, it finds, are drinks and personal care products. Some 60% of shoppers usually or sometimes purchase private-label bread or baked goods, and 58% usually or sometimes purchase store brand cheese.



"The lack of perceived difference can be attributed, in part, to the fact that many retailers have introduced premium private-label products in recent years that rival their branded counterparts in flavor and nutritional value, as well as the packaging design and shelf placement," writes Fiona O'Donnell, senior analyst at Mintel. "Even though the recession has ended, and consumers may be in a better position financially to return to name brands, it's likely that many will continue to buy store brand staples that are of equal quality."

People are also increasingly confident that the savings private labels offer is significant. A recent study from the Private Label Manufacturers Association tracked 40 typical grocery items at a conventional supermarket, ranging from soup to pancake mix to sinus spray and cough drops, and found that buying private-label products when available saved $43.92 (a savings of 33.6%) on average on the total market basket.

3 comments about "Only 19% Think National Brands Are Worth The Money ".
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  1. Stacy Graiko from Firefly Millward Brown, January 24, 2011 at 10:19 a.m.

    Interesting self-reported data, but I wonder if actual sales data supports the theory offered here that consumers' preference for store brands is increasing? I would bet, if offered side-by-side for the same price, that most consumers would choose the brand name product due to deeply-rooted associations with better quality. Thoughts?

  2. Doug Garnett from Protonik, LLC, January 24, 2011 at 1:23 p.m.

    I'm of several minds with this research.

    It's nearly impossible to get consumers to accurately tell you anything that you can use to predict shopping habits in this area. This seems to be quite broadly phrased research which would inherently decrease the value of brands. So, seems like the research should be treated with caution.

    At the same time, too many brands have been spending their marketing money poorly - meaning that they're increasing the speed with which consumers decide the brand doesn't offer a significant value. "Brand Advertising" tends to ignore what the consumer really cares about: the product. Instead, it emphasizes issues of minimal value to the consumer: "we -get- you", "'we have the lifestyle you want to live", ... Nice. But doesn't make the cash register ring.

    And finally, good for store brands. There are some superb brands that stores have built which bring consumer significant added value.

    All-in-all, much too complicated an issue to be treated so briefly in a survey of this type.

  3. Lisa Merriam from Merriam Associates, January 26, 2011 at 1:11 p.m.

    But consumer opinion doesn't match behavior. Store brands still earn the minority share of shoppers' purchases across categories. Stats are here: (URL removed by MediaPost)

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