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Private label a key differentiator for leading grocers

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In an increasingly competitive and homogenous marketplace, own label has emerged as one of the key tools that the UK’s leading supermarket operators have at their disposal to differentiate themselves. Across the board, private label ranges have been relaunched, boasting better quality and value credentials and backed up with strong marketing support. As a result, these ranges have been rewarded with improving shopper perceptions and increasing own label participation. Our latest shopper panel (across 1,000 UK shoppers) backs this up and takes a closer look at current attitudes towards these types of products. We also asked shoppers how they’d like to see the ranges develop and which retailers they perceive as the leaders.

The feedback was really interesting. Price continues to remain a key issue for shoppers when considering supermarket own label goods despite these products typically retailing for less than well-known branded items. Three-quarters of main grocery shoppers in our survey said that they believe supermarket brands should always be cheaper than branded products.

The recent investments in private label reformulations and relaunches have also paid off - with two-thirds of shoppers believing that supermarket own branded products have improved greatly over the past couple of years. Furthermore, this is seemingly translating into sales conversion with over half of respondents buying more own brand products now compared to a year ago. Looking to the year ahead, nearly half of shoppers say they expect they will buy more supermarket own branded products in a year’s time – so good news for the supermarkets! It was also interesting to discover that 29 percent of shoppers consider supermarkets’ premium private label ranges to be superior to branded goods. Literally food for thought…

In terms of own brand developments moving forwards (from the supermarket that shoppers use most often), few would be surprised to find out that ‘lower prices’ topped the wish list. Despite improvements to the economy, the cost of food remains a cause for concern for the majority of shoppers.

Perhaps less expected was the demand for more British products - mentioned by almost half of respondents. Larger, healthier ranges were also mentioned by a high proportion of respondents (42 percent).

The savvy shopper mindset remains clear with 35 percent wishing to see larger value ranges, while only 19 percent want more premium lines from the grocer they use most often.

To sum up, the research backed up our thoughts on the growing popularity of own label goods and we expect this type of development to remain a firm priority for the biggest grocery retailers this year. It will, however place further pressure on weaker brands that look placed to bear the brunt in an increasingly challenging market where sales volumes are more important than ever before.

Published on Tuesday 29 April by Editorial Assistant
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