Private Label Gains Ground With Price-Conscious Consumers

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July 19, 2011

Savvy consumers are purchasing more store brands products, according to Deloitte LLP’s “2011 Consumer Food and Product Insight Survey.”

Nearly two in five respondents (39.6 percent) to the survey added more private label products to their grocery bags, believing that prices in food stores are rising (87.7 percent) and that some package sizes are smaller (74 percent,) according to Deloitte.

High gas prices are also affecting shopping behaviors. Nearly three in four respondents (72.7 percent) are making fewer trips to the grocery store to save money and more than two-fifths (40.8 percent) are purchasing fewer items overall.

"Higher prices, smaller package sizes and pain at the pump are driving consumers to buy lower-priced grocery items," said Pat Conroy, vice-chairman, Deloitte LLP and the U.S. consumer products practice leader.

Consumers are also paying more attention to "front-of-package" nutrition information to help them make healthier decisions, according to the survey. Nearly one-half of respondents (49.3 percent) agree that packaging that displays a row of standardized icons called "nutrition keys" on the front of the package with standard ingredients listed on the back would be very helpful for purchasing decisions. Some companies are currently doing this on a voluntary basis. The survey also found that more than half (51.1 percent) of food shoppers read the ingredients on unfamiliar food items.

Traditional supermarkets drew nearly four in five respondents (79.7 percent) to purchase food during the past year. Large super centers -- those that sell food, clothing, etc. – are the second most sought after food buying destinations with more than three in five respondents (61 percent) purchasing groceries at these venues in the past year.

Outside of shopping at supermarkets and super centers, nearly one-third of consumers (32.6 percent) met their grocery needs by visiting a dollar store over the past year. The survey also found that more than two in five respondents (22 percent) bought food at a drug store and slightly less than 1 in 20 shoppers (4.9 percent) visited an online retailer or food manufacturer to purchase food.

The proliferation of smart phones and a much savvier base of shoppers have spurred consumers to use mobile devices to assist with several aspects of their shopping routines, according to the survey. More than one-third (34 percent) of smart phone users research food prices or product information while in a store.

More than two-fifths (43 percent) of smart phone users have managed a food shopping list on their device while not in a store.

Overall, more than one-half (53 percent) of shoppers surveyed are increasingly using technology to obtain information about food products and more than one-quarter (28 percent) of respondents interacted with a food retailer via their mobile application or website. Furthermore, more than one-fifth (23.5 percent) of survey respondents expect their smart phone-related grocery shopping activity to increase next year.

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