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.