Study Points to Private Label Remaining Strong

Over the past year, financial concerns have driven many consumers to make the switch from national food brands to private label products. But as the economy gradually improves, many of those consumers now say they will stay loyal to the less expensive grocery store brands.

Price still a key influencer

According to the newly released study Control Label Perceptions, Usage Patterns & Intentions, conducted by market researcher The NPD Group, Inc., consumers continue to concentrate on price when making food purchases. When asked about their purchasing habits over the last year, and purchase intentions over the next 12 months, two out of three Canadian households say private label products represent 50 per cent or more of their total food items.

Of the 623 consumers polled from April 30 to May 8, 2009, 55 per cent say they believe store brands to be just as good as name brand products. Nine out of 10 also say private label products meet or exceed their expectations. And approximately half of respondents say they buy food products that offer the lowest price and best value, regardless of the brand.

All households now buying private label

“Our research shows that nearly every Canadian household is consuming store brand goods in some form or another within an average week,” says Joel Gregoire, food and beverage industry analyst for The NDP Group. “As the perceived quality gap narrows, name brands will increasingly need to invest in game-changers by raising the bar on innovation in order to stand out from the crowd.”

The study did find one difference in perceptions of private label beverage quality however, with 58 of consumers polled saying they still favour name brand beverages. Breakfast items and in-home snacks also remain strong for national brands.