Store Brand Grocery Sales Driven By Price, Quality, Selection

July 10, 2012

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | CPG & FMCG | Data-driven | Promotions, Coupons & Co-op

accenture-store-brands-attitudes-july2012.png64% of grocery shoppers claim that half or more of the groceries they buy are store brand products, while 7.8% claim that all the products in their basket are store brand, and only 14% say that store brands account for less than 10% of their grocery purchases, according to a July 2012 study by Accenture. Price is the key driver in selecting store-brand and private label products, with roughly two-thirds of shoppers saying they buy store brands because they are cheaper.

But, 50.2% believe the quality of store brand products is just as good as name brands, 47.8% believe stores are offering an improved variety of store brand product, and 41.6% trust particular store brands. Only 8.6% claim not to buy store-brands because they feel that the quality or taste is inferior to the brand name product.

According to May 2012 survey results from Ipsos, a significant proportion of US consumers believe that store brands are equal to or even better than national brands in several key areas, including ones traditionally seen as national brand differentiators. For example, while a somewhat unsurprising 9 in 10 said that store brands compare equally or favorably to national brands in terms of value for the money, 7 in 10 also said that store brands were either better than or about the same as national brands for offering high-quality products. Similarly, most respondents said that store brands were on equal or better footing when it comes to offering products they trust (78%).

Price Trumps Name Brand Appeal

While 39.4% said they have increased their purchase of store brands in recent years as a result of the tough economic times, 76.8% would not return to branded products if their disposable income returned to pre-recession levels, per Accenture’s “Private Label Research 2012” report. This aligns with June 2012 results from Acosta, which found that roughly 3 times as many shoppers plan to stick with store brands as plan to buy more national brands when their budgets increase – a finding that notably holds true across the income spectrum.

According to the Accenture report, one-time sales are insufficient to regain most store brand customers: 51% said the brand name product would have to come down permanently in price to the store brand level to encourage their return. Another 27.2% could be persuaded by coupons. 5.6% would need to see scientific proof of the brand name’s superiority. But 12.4% claimed they could not be persuaded at all.

3 in 5 Willing To Try Dedicated Websites

Just 24% of consumers are aware that some name brands like Procter & Gamble sell direct-to-consumer via dedicated websites. 57.8% of consumers said they would consider buying goods through that route. Of the remaining 42.2%, roughly three-quarters said they would not want to pay for shipping, 52.6% would prefer to make all of their purchases in one place, and 31.8% want the variety offered in a retail store.

Manufacturers can overcome those objections with free shipping, cited by 86.6% as an incentive to try a purchase from a manufacturer’s online store. Discount prices comparable to in-store prices would sway by 75.8%, while a loyalty scheme to reward regular purchase would encourage roughly half. 21.8% could be attracted to online buying by new or different products.

Other Findings:

  • 18.8% of the respondents claimed to make their purchase decisions in-store.
  • 31.6% say they “buy whatever I fancy.”
  • 11.2% research prices and products before leaving home, but just 0.8% use price comparison applications to plan their purchases.

About The Data: Accenture conducted an online survey using a representative sample of 500 U.S. consumers in May and June 2012.

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