SYDNEY. 9 November 2009 — The battle for the supermarket floor between private label and branded goods is heating up with private label reaching a record share of the grocery market in Australia, according to new research by market insight and information group TNS.
TNS’ director of consumer research, Nicole Marquardt, warned that a purchasing mentality had emerged that was here to stay, with private label growing amongst most shopper groups, particularly adult households, young singles and young couples.
“Private label’s growth has been spurred by the economic downturn, but when we look at the motivators behind its purchase, we find that few consumers are buying it in response to the recession with many there by choice,” said Marquardt.
“People are opting for private label for a myriad of reasons, the foremost being to save money to spend on the family, the belief that brands are all hype and not of superior quality, and to display thrift by being smart selectors.
Surprisingly, the research found that a large proportion of Australians who buy private label do so despite being concerned over potentially lower quality, inferior status image, poor packaging and lack of innovation of the products.
The groups of private label buyers found in the research were:
- The Committed Cost Cutters (12% of the population): Who view buying private label as a responsible use of their often limited family budgets and are perfectly happy with the quality.
- The Smart Selectors (24% of the population): Who believe that brands are all hype and are happy that they can see through them to know that private label products are really just the same.
- The Success Symbolisers (30% of the population): Often young, this segment feels that their budget has forced them into private label. They are not convinced of its quality and feel self conscious about buying it.
- The Label Lovers (11% of the population): Will sneak a private label product or two but only if no one sees – they're put off by poor packaging and a lack of innovation.
- The Belt Tighteners (10% of the population): Often facing tougher circumstances due to the recession they feel forced into purchasing private label due to their finances but are hoping it’s just a temporary thing.
- The Brand Believers (13% of the population): Feel strongly that brands are better and are annoyed that Private Label products are taking over the shelves.
“We’re seeing that the majority show interest in private label regardless of the category, even in those that were traditionally resistant to the threat.
“Purchasing behaviour does not always reflect loyalty to private label, but can also be an indication that branded manufacturers have few true ‘brand believers’,” said Marquardt.
“The implication for retailers and manufacturers is there is no one-size-fits-all approach when it comes to private label.
“There are huge variations across category and shopper types, but when it comes down to it consumers have a new purchasing mentality that the cheaper product can be just as good.”
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About the Private Label Study
In a nation-wide survey of 3,000 consumers conducted by TNS in July, six distinct attitudes to private label products were found along with some surprising facts about how consumers are feeling.
About TNS
TNS, who recently merged with Research International, is the world’s largest custom research agency. In Australia, we have been the leaders in custom research and analysis for over 40 years, combining our global resources with local understanding of consumer, finance and business, social and government, technology, healthcare, and travel and leisure sectors. Our product offering stretches across the entire range of marketing and business issues, specialising in product development and innovation, brand and communication, stakeholder management, retail and shopper, and qualitative research. Delivering best-in-class service across more than 75 countries, TNS is part of Kantar, the world’s largest research, insight and consultancy network. Please visit www.tnsglobal.com/australia for more information.
