New York – A study released Tuesday by Accenture found that, in the grocery arena, store brands continue to steal sales from brand-name products.
According to Accenture’s poll of 500 U.S. consumers, 64% said their grocery carts were at least half full of store-brand products, and 39% said they have increased their purchase of store-brands in recent years as a result of the tough economic times.
Price remains the key factor in the majority of store-brand purchases. Two thirds (66%) of shoppers said they buy store-brands because they are cheaper. Also, while 87% of shoppers said they would buy more brand-name products if they were offered at the same price as the comparable store-brand, 51% said that it would take a permanent price reduction of the brand-name product – to the same price as the store-brand – to persuade them to return to purchasing the brand-name product.
Half of consumers surveyed said they buy store-brand products because they perceive the quality to be just as good as the brand-name equivalent, 42% buy a private-label product because they “trust” that particular store’s brand, and 28% simply prefer the store-brand product to the brand-name product. Just 9% claimed not to buy store-brands because they felt that the quality or taste was inferior to the brand-name product.
“Consumer goods companies must respond to the threat of increasing competition from store-brands as market position and profitability are at stake,” said Bob Berkey, from Accenture’s Consumer Goods & Services practice. “Extreme competition between retailers and consumer goods companies can result in inefficiencies and waste for manufacturers and retailers, and undifferentiated products for the consumer.”
More than three-quarters (77%) of shoppers said they would not decrease the amount of store-brand products they buy even if their disposable income were to return to the same level as it was before the economic downturn.