Deloitte has just released its latest peek into America’s pantry, and what it finds should terrify national advertisers. Private-label brands, which gained such big ground during the recession, are still drawing new fans: It reports that 88% of consumers now swear by store brands, and say they have found many private-label products just as good (or even better) than their former favorites.
The study, based on 4,025 American adults, looked at 375 different brands in 30 categories. It also reports that 71% believe they are spending less on their grocery bills, without sacrificing much. And only 31% say brands can be a “must have,” something they’d buy whether it was on sale or not.
And while people say store brands are either the same or better in 28 of those 30 categories, they tend to remain committed to brands (regardless of price increases) in four areas: Beer, soft drinks, pet food and coffee. They’re least likely to care about brand names in bottled water, tabletop disposable paper products, food storage, deli meats, condiments and salty snacks.
“National brands are pressured on all sides, from persistent consumer frugality and low brand loyalty to rival and store brand competition,” says Pat Conroy, vice chairman, Deloitte LLP and U.S. Consumer Products leader, in its release of the new data. “While consumers initially resented buying less-expensive products out of necessity, they have shifted from a feeling of settling for lower-priced brands to settling in to store brands distinguished by high quality.”
Additionally, he adds that in many categories, brands suffer “from a crisis of the similar,” giving consumers no compelling reason to choose their product instead of a store brand.
Overall, 91% of those in the survey describe themselves as more resourceful. It broke shoppers up into four categories, led by spectators (32%), who have the highest income, are most brand loyal, and also most motivated by convenience; super savers (26%), who are most likely to use mobile and online for price comparisons; planners (23%), who save big by thinking ahead, and sacrificers (19%), who are least brand loyal, have the lowest income, and seem more resentful at “having” to buy store brands.
Deloitte’s findings square with the latest tallies from the Private Label Manufacturers Association, which says that through the end of 2013, as tracked by the Nielsen Co., store brands’ share of America’s shopping carts are at record highs. In grocery stores, private label brands’ unit and dollar shares rose to 23.4% and 19.4%, respectively. Across all outlets combined, which includes Walmart and other mass merchandisers, club stores, dollar stores and military exchanges, shares moved up to 21.2% in units and 17.5% in dollars.
The trade group says that since 2011, annual sales of store brands in supermarkets have advanced 3%, and risen 9% in drug stores. Across all outlets, annual sales have added 5%.