More consumers defecting to private labels (9 Sep 2009, The Wise Marketer)
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More consumers defecting to private labels

   
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Wednesday September 9, 2009                      Tweet this article

 


Some 31 million British shoppers (73% of adult consumers) are opting for supermarkets' own-brand labels in a bid to save money on their weekly shopping, according to research from price comparison shopping service uSwitch.com.

The proportion of consumers switching to private label goods has tripled since a similar survey in August 2008 when only 25% of shoppers said they had abandoned premium labels in favour of own-brand grocery items.

According to uSwitch, a signficant proportion of the observed increase could be attributed to supermarkets expanding their private label product ranges in a bid to stop consumers switching to cheaper grocery chains. For example, Waitrose now has an 'Essentials' own-label range, Tesco has a 'Discounter' range, and Sainsbury's has a 'Switch & Save' campaign which calculates own-brand savings for the customer.

Not only has this activity secured repeat visits from existing customers but it has also slowed the rapid growth of overseas competitors such as Aldi, Iceland and Lidl, according to recent TNS Worldpanel market share figures.

Overall, the study found that 90% of UK adults now use recession-busting shopping strategies when they do their weekly shopping. Money off vouchers have also reached the top of the shopping list with the number of frugal consumers regularly using them increasing sharply to 74% (compared to only 26% in 2008). Moreover, 20% now compare prices online before going to the supermarket (up from only 6% in 2008).

And when it comes to shopping online, 6.4 million consumers now claim to avoid the hustle and bustle of their local supermarket by doing their weekly food shopping online (three times the number that did so in 2008). In fact, this option has become so popular with British consumers that some industry commentators are predicting that the value of online food sales could reach 8 billion by 2011.

Recession-driven cut backs in consumer spending at the supermarket could, however, have some positive lifestyle implications for many shoppers as they revert to more wholesome and natural ways of doing things. Almost one-fifth of consumers have now taken to growing their own fruit and vegetables (more than twice as many as in 2008).

According to Rumina Hassam, a personal finance expert with uSwitch, "In the face of uncertain economic forecasts, continued volatility in the housing market, and increases in unemployment, many consumers are making cutbacks to their fundamental spending routines to beat the recession. But all these lessons in smarter spending as a result of the recession are likely to remain with consumers, even after the economy recovers."


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