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Survey suggests store brands could be losing appeal

By Caroline Scott-Thomas , 25-Jul-2011

Store brands are still perceived favorably by consumers but they may be losing some of their appeal, according to the results of a new poll conducted by market research firm Ipsos Marketing.

Growth in the private label, or store brand, sector over the past couple of years was widely seen as a result of recession, but although some private label food products are simply cheaper imitations of familiar brands, there is now a greater range of store brand products on offer, with many more focused on delivering quality as well as value. This led some market analysts to speculate that the appeal of store brands could endure even as the economy recovers.

This latest poll found more than 80 percent of consumers surveyed said they considered store brands at least as good as national brand products in terms of value for money and convenience. However, it also found that consumers rated store brand products lower in several key areas than they did in an identical poll conducted a year earlier.

President of Ipsos Marketing’s global shopper and retail research Gill Aitchison said: “Our data indicates that store brands still pose a strong challenge to national brands, but perhaps consumers are becoming a little bit more discerning about the benefits delivered by national brands. We see that store brands, which initially distinguished themselves as being a low-cost alternative and evolved to offering what many consumers perceive as products comparable to national brands, are showing signs of vulnerability.”

Consumers’ ratings of store brands slipped furthest in several specific areas, including “offering high-quality products” and “offering environmentally friendly products”, which saw declines of six percentage points year-on-year.

Consumer perception that store brands were innovative, unique or trustworthy also declined by five percentage points each.

“National brands must be cautious when they see changes in attitudes and behavior toward store brands,” Aitchison said. “These changes stem in part from shifts in the economy and the economy is still very volatile. However, the strategies that many manufacturers implemented for their national brands seem to have led to some success against store brands. National brands should continue to focus on the benefits where they are most differentiated from store brands, namely packaging, innovation and uniqueness – which, in turn, will help drive trust and quality perceptions.”