Store Brands Soar and Gain Loyal Customers

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August 23, 2011

Private label growth continues across categories with more shoppers now choosing store brands and sticking with them, according to a recent survey by Acosta Sales and Marketing.

The Jacksonville, Fla.-based broker and outsourced sales and marketing agency found 41 percent of shoppers said that nearly half of all purchases are now private label to save money. Half of those surveyed said store brands present a better value than national brands and 40 percent are inclined to buy even more private label products for the savings.

Even more critical is that one third of shoppers say they choose which store to shop for specific products based on how much they like the store’s brands. Quality is important and the majority of shoppers see little difference between store brands and national brands, or between the various private label lines at competing stores.

Fifty-one percent of shoppers said the overall quality of store brands is about the same as nationally advertised brands, although this view varies with income levels. Notably this sentiment is highest with upper-income shoppers -– those making between $75,000 and $100,000 annually -– and store brands popularity is lowest among middle-income shoppers.

Consumers don’t just appreciate the value that store brands represent, but perceive the differences in quality among private label products; even among brands sold by the same retailer. Approximately 87 percent said that even within the same store, some store brands products were better than others.

Younger shoppers are more aligned with store brands, with Generation X and Generation Y customers (ages 18 to 44) more likely to see private label as a better value than national brands. These shoppers are, in fact, becoming more brand loyal to store brands and not just buying them to save money, according to the report. Baby Boomers remain more national brand loyal, in spite of economic pressures.

Acosta asked shoppers if they plan to stay with store brands when the economy improves, and here is where the opportunity for private label lies: just three in 10 shoppers said they would continue to buy private label when their budgets increase and six in 10 said that decision will depend on the product.

The longer the weak economy pressures household budgets, the longer the opportunity for store brands to make their mark and win over tentative shoppers, according to the research.

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