Americans Plan to Up Private Label Buys

The appeal of store brand products is stronger than ever and may even be intensifying, according to a poll of nearly 800 main household grocery shoppers conducted in February 2010 by GfK Custom Research North America for the Private Label Manufacturers Association. The full report, titled “Recession, Recovery and Store Brands” found more than six in 10 American consumers said they plan on buying more private label as they attempt to stretch their food dollars.

Consumer awareness of store brands is also rising. More than half of respondents said they are more aware of store brand products now than they were a year ago. Moreover, shoppers who identify themselves as “frequent” buyers of store brands are at an all-time high. Some 57 percent say they buy private label products frequently, a figure that has been increasing (it was under 55 percent a year ago).

A greater number of shoppers are switching to store brands in product categories where they had previously only purchased a national brand. Some 43 percent report they have recently forsaken a familiar national brand for a private label counterpart, a marked increase since June 2009 when only 35 percent said they had done so.

Virtually all of the shoppers who switched are pleased with their decision. Ninety-seven percent compared store brands favorably to their previous national brand choices in the same categories. About half said that their store brand selections compare “very favorably,” a dramatic increase from the June 2009 study when only one quarter reported that.

Other findings that may also accrue to store brands’ benefit: Half of shoppers intend to spend less money on groceries in the months ahead, and four in 10 American consumers believe economic conditions were “very important” in deciding to buy a supermarket store brand . For most American shoppers, the recovery has yet to begin. Asked whether the economy has changed over the past few months, 40 percent said conditions were worse, while another 42 percent said things have stayed the same. Fewer than one in five felt the economy had improved.

Beyond private label products, study participants endorsed a variety of strategies to cope with what they see as a persistently difficult economy. When asked how they think the economy will impact their supermarket shopping habits, more than two-thirds said they will take advantage of discounts by buying larger sizes or quantities for items they regularly purchase; two-thirds will look for more coupons and promotions on national brands. About a third plan to change the stores or types of stores where they do their primary grocery shopping.

PLMA commissioned GfK to monitor consumer attitudes and behavior toward store brands in the United States. The February 2010 survey updates findings from two earlier PLMA studies on “Store Brands and the Recession,” published in February 2009 and in June 2009.