Kraft, Coke, Tide Least Likely to Be Traded Down

October 26, 2009

Cash-strapped US consumers rate price as top priority in their household/grocery purchasing decisions and are increasingly defecting to private labels, but they are least likely to trade Kraft, Coca-Cola, and Tide for store brands, even though 84% of shoppers see brand names as more expensive, according to the latest results of a yearlong shopper experience study by The Integer Group and M/A/R/C Research.

However, despite the resilience of these few top-shelf brands, July 2009 results from “The Checkout,” reveal that only 37% of consumers? say name brands are more reliable, and 39%? believe name brands are better quality products.

The study also found that more than eight in 10 consumers seek products on sale and compare prices between brand name and store brands when buying groceries or household products, and consumers who are buying more private-label products say they won’t return to name brands in the foreseeable future.


Discounts and Brand Promises

These trends toward comparison shopping,? purchasing based on lower price and decreasing differentiation among brands suggest that brand-names will need to offer more discounts and coupons -? and more consistently deliver on brand promises in the future – if they hope to keep customers from defecting.

“With this many shoppers doing price-comparison, name brands need to act now in order to keep consumers – and beyond the recession, entice consumers to return,” said Craig Elston, SVP, The Integer Group.

Additional study findings:

  • Shoppers buying more store brands than last year outnumber those buying fewer by more than four to one (36% vs. 8%).
  • Though two-thirds of shoppers believe that name brands offer more novelty and innovation, less than half believe that name brands also offer better or more reliable products.
  • African-American consumers believe in the higher quality and reliability of name brands more than other ethnic groups.
  • Minimizing shopping trips remains the primary goal for shoppers, though not as much as it was in June, when the study was last conducted.
  • Shoppers ages 65+? are less price-sensitive than other age groups and are more likely to value getting everything in a single trip and finding the best-quality items.
  • Buying behavior for July closely resembles that for June, with more than half (54%) buying fewer or less-expensive items. Women continue to account for the largest portion of shoppers trying to spend less. African-American and Hispanic shoppers are also more likely to report buying fewer or less-expensive items than Whites are.
  • Shoppers ages 35+ tend to use more manufacturer coupons and circulars from newspapers or in-store. Younger shoppers (18-34) report higher use of touch screens, associates, posters, and self-checkout.
  • The use of mobile phones for shopping assistance increased 3% from June to July.
  • Consumers remain as price-focused in July as in previous months – willing to put off purchases and buy products where they are offered at the lowest price.
  • Shoppers younger than age 65 are more likely to seek out lower prices than those ages 65+.
  • Consumers? consider Kroger, Walmart, and Target to be stores that carry the best private-label brands.

About the study: Data for “The Checkout” comes from a nationally representative survey of 1,200 US adults conducted by Integer and M/A/R/C where consumers are asked about their shopping attitudes, shopping behaviors, and economic outlook. Topics range from criteria shoppers use to select retailers, to which in-store stimulus is most likely to drive purchase, to factors that might lead shoppers to leave an aisle empty-handed.

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