Consumer Perceptions of Store Brands Still Strong, But National Brands Gain Ground

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July 26, 2011

While the majority of global consumers still perceive store brands to be the same as or better than national brands, a one-year trend analysis indicates that positive perceptions toward store brands may be eroding slightly, according to a study conducted by New York-based Ipsos Marketing, Consumer Goods.

Consumers from around the world were asked to compare store brands to national brands on a host of attributes. Although, more than 80 percent indicated that store brands are the same as or better than national brands, store brand ratings declined somewhat versus the prior year’s study, most notably in the areas of environmental friendliness, quality, trustworthiness, uniqueness and innovation. Taste, efficacy of household products and packaging appeal slipped as well.

Consumers’ perceptions of store brands in nearly all countries surveyed showed a decline compared to the year before, with Mexico and Argentina being notable exceptions to the trend.

“Our data indicates that store brands still pose a strong challenge to national brands, but perhaps consumers are becoming a little bit more discerning about the benefits delivered by national brands,” said Gill Aitchison, President, Ipsos Marketing, Global Shopper & Retail Research. “We see that store brands, which initially distinguished themselves as being a low-cost alternative and evolved to offering what many consumers perceive as products comparable to national brands, are showing signs of vulnerability.”

The attitudes toward store brands align with a decline in private label unit share in the U.S. According to the Times and Trends report released by the SymphonyIRI Group in May 2011, “…dollar share growth [among private label in the U.S.] is slowing, and unit share has taken a negative turn.” This slowdown occurred from August 2010 through May 2011. The Ipsos survey was conducted in the midst of this slowdown in December of 2010.

“Certainly the economic crisis propelled the purchasing of store brands in 2009. In terms of attitudes, consumers may have tried store brands during the recession and found them satisfactory – or they may have had more positive perceptions as a way to justify having to buy these brands during their hardest times. At the same time, national brands battled fiercely against the store brand onslaught. National brands pushed hard against innovation and sustainability, areas in which store brands are generally weaker. Moreover, manufacturers re-positioned some of their national brands as being good values, making them more appealing to consumers.”

A total of 17,146 adults participated in the survey from Argentina, Australia, Belgium, Brazil, Canada, China, France, Great Britain, Germany, Hungary, India, Italy, Japan, Mexico, Poland, Russia, South Korea, Spain, Sweden, Turkey and the United States.

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