Grocery Store Brand: Private Brand vs Name Brand

The past duo of years have bot economically harsh for consumers worldwide and value for money is becoming an increasingly significant hacedor when making purchasing decisions. This has prompted a switch ter consumer buying behavior, one that is particularly visible with grocery shoppers choosing private labels increasingly more overheen name brands. Despite this trend, shoppers are continuing to buy brand names but only ter certain categories. This article analyzes the emerging trend of the thrifty shopper and evaluates factors that lead consumers to proceed buying certain brand names during raunchy times and te other cases, switching their loyalty to private labels.

Grocery Store Brand

Private labels, also commonly referred to spil ‘store brands’ or ‘generics’, conventionally tend to be viewed by the public spil low-cost imitations of branded products. Te its early years, the packaging wasgoed plain white, the lettering wasgoed solid black and the product quality wasgoed inferior to name brands. Te latest years however, private labels have bot able to overcome this earlier reputation and have bot able to achieve significant growth.

Private label goods are products sold by retail stores that are also produced by the same retail store. For example, Portuguese supermarket Pingo Doce will sell Compal passion fruit juice and right next to it will sell its own brand of passion fruit juice. Private label products are always less expensive than brand name products because they need to be able to rival with the big brands. They save money by not having to spend money on distribution channels and advertising since they have their own.

Retailers are capitalizing on the latest shift te public perception by suggesting quality private label products, which can foster a feeling of brand loyalty. This can give retailers a significant advantage overheen competitors.

According to a US Food Marketing Institute examine titled “The Food Retailing Industry Speaks 2009,” retailers earn a 35 procent gross margin on store-branded products compared to 25.9 procent on comparable nationally advertised brands. So retailers are strongly focused on boosting customer service and the quality of their store brands to build customer loyalty, which te turn, builds profit.

Grocery Name Brands

Name brands, also commonly referred to spil ‘national brands’ or ‘big brands’ are brands that are more expensive due to higher marketing and advertising costs than their generic counterparts and/or shelf positioning. Name brands have many advantages overheen generic brands, thesis include:

Consumer Packaged Goods Trends

Rising commodity prices and consumer desire to get the best price overheen value products are driving private label’s growth. According to a examine released by the Nielsen Company te November of 2008, almost three-fourths (72%) of American respondents surveyed viewed private label brands spil omschrijving to name brands, while 62% said store brands were just spil good spil name brands. This trend is not limited to the United States but is integral.

Two years following the abovementioned investigate, Nielsen conducted a completo online survey that exposed that 60 procent of consumers across 55 countries from Asia Pacific, Europe, North America, Latin America and Middle East/Africa[1] are stocking their cupboards with more store brands spil a result of the economic downturn. The chart below illustrates that this is a worldwide trend, with similar behavior across regions.

Specifically te Europe, consumers te Spain, Portugal and Greece reported the highest levels of private-label purchase intent during the economic downturn, at 79%, 74% and 70% respectively. On the contrary, the lowest reported drift toward private label came from consumers te Sweden (70%), Thailand (62%), Hong Kong (60%) and Denmark (59%) who indicated they did not purchase more store brands during the recession.

[1] Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa

Customers Will Proceed Buying Private Food Labels

A whopping 88 procent of shoppers globally said they intend to keep buying private label even after the economy improves, suggesting that store brand quality has reached parity with brand names and produces on consumer expectations, according to Nielsen. Countries with the most value-conscious consumers when it comes to private label include Austria and Germany, registering a better than 95 procent intent to proceed purchasing private label. On the other mitt, shoppers from just four countries have no intention to buy private label te the future – the Ukraine (31%), Pakistan (28%), the United Arab Emirates (27%) and Venezuela (27%).

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