Private label products more popular than ever

Private label goods account for close to a quarter of all grocery purchases in Australia according to market researchers Nielsen.

The company found the amount spent by the average Australian household on store brands reached its highest level of all time in the June quarter – up 5 per cent on the corresponding period last year, to $A172.80.

The Nielsen report, ‘Smart shopping in challenging times,’ discovered that the number of households purchasing private label products across all the major chains has grown, as fears about the global economy and improving perceptions of product quality spur demand. The strong growth rates may not continue in the coming years, but the study suggests that market share inroads made will be unlikely to be fully recovered by branded manufacturers. Around 57 per cent of consumers said they had been switching to cheaper grocery brands to save on household expenditure over the past year, and over a third (34 per cent) said they would continue to purchase cheaper grocery brands even when economic conditions improve.

The improving perceptions of private label quality have strengthened the potential for retailers to hold on to much of their gains, with younger demographics, in particular, seen to be becoming more responsive to store brand offerings.

A Homescan PanelViews Survey undertaken by Nielsen in September last year found 60 per cent of households agreed that private label products are much better than they were five years previously.

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