While more US adult consumers are increasing their spending than cutting back, that doesn’t necessarily mean they’re being more liberal with their spending on name brands. In fact, a report [pdf] from IRi reveals that not only are consumers buying private label products, but they are also doing so across all income brackets.
Per IRi’s findings, all (99.9% of) shoppers now buy private brands, with one of the biggest drivers in purchasing these products being the desire to save money. And while buying private label to cut costs is anticipated among consumers in lower-income households (such as the 88% with a household income (HHI) of less than $35K or 86% of consumers with an HHI between $35K-$55K), higher-income households are also participating in this shopping behavior. More than four-fifths (83%) of consumers with HHI of $55K-$100K and three-quarters (74%) of individuals with HHI of more than $100K also report buying private label products to save money.
That being said, affluent consumers (those with HHI of at least $100K) are slightly pickier about where they purchase private label products. Some 65% say that they buy private label options only from certain stores they trust, compared to the 60% of those with lower HHI (less than $55K). Affluents also appear to be more selective about which private label products they are willing to purchase: half (50%) saying they often buy private labels instead of name brands, compared to more than two-thirds (68%) of consumers with HHI less than $35K.
These two factors may be what has spurred a rise in premium private label sales. Nielsen recently revealed that while discount grocery stores have experienced a decline in private label sales, stores like Whole Foods and Sprouts have seen growth in their premium private label options.
Generationally, only 63% of Millennials say they can easily afford needed groceries, compared to 86% of Seniors, 74% of Boomers and 77% of Gen Z. This has possibly led to a high percentage (87%) of Millennials reporting that they buy private label products to save money and another 79% also saying they try new, lower-priced brands to save money.
The full report can be downloaded here.
About the Data: Findings are based on a Q3 2019 survey of more than 2,000 US adults.
