With 36% of consumers switching to cheaper supermarkets and 10% of ‘wealthy’ shoppers using pound shops, the opportunity for high-quality, low-cost alternatives to branded lines is better than ever, writes Elit Rowland
Not long ago, own-label lines were shunned by the average shopper as low-quality substitutes for the big brands. Private brands would be relegated to the bottom of retailers’ shelves and hidden among bigger names in wholesalers’ depots. But today, consumer demand for more choice and a better price is pushing own-label higher up the retailer’s and caterer’s agenda.
But it’s not just blue-collar workers who are opting for better value – all consumers are changing the way they shop. A recent AXA report revealed that 36% of shoppers say they have switched to cheaper supermarkets and 10% of so-called ‘wealthy’ consumers have given in to the temptation of pound shops. Meanwhile, 22% of shoppers are cutting back on food spending altogether.
53% of retailers and 44% of customers purchase own-label products every time they place a delivered order (Him!)
46% of caterers say it’s important for cash & carries to offer own-label options in tinned and packet grocery. 52% say the same for cleaning & laundry products (Him!)
70% of shoppers are switching to own-label cleaning products (AXA)
For wholesalers, this means that own-brand is a critical part of their proposition and one category that’s looking particularly promising is cleaning, with 70% of shoppers having recently switched to an own-label cleaning product.
The sales figures coming from own-label are also speaking for themselves. Take Bestway’s Best-In range, which is now reported to be twice the size of Heinz beans and pasta meals in impulse.
For the buying groups that support wholesalers, the story is the same: just last month, Landmark Wholesale announced that its own-label range for retailers, Lifestyle Value, is up 43% compared with the previous year.
“Historically, there has been a stigma in buying own-label from an independent rather than a supermarket. But brands are not as sacred as they once were,” explains Nick Brown, category manager of own-label at Bestway. “This can be seen from the prevalence of Aldi and Lidl, which stock very few brands.”
Bestway advises its retailers to stock an own-label price-marked variant across each category to offer consumers better choice, which is important when over half of retailers are asking for them.
“More than 50% of the retailers we have spoken to expect own-label products – the most mentioned category was tinned and packet grocery,” explains Jill Livesey, Shopper insight & marketing director at research-consultancy Him!
On the foodservice side, demand is lower, with just a third of customers seeing own-label as important. “There is clearly an opportunity to better understand foodservice and catering customers’ needs. Demand for own-label here varies by category. Up to 50% of customers we spoke with expect own-label cleaning products, but less than a third in wine and beer.”
Whether you offer an own-label variant to your retail, catering or foodservice customers, one thing is clear: the expectation for value is higher than ever. “We noticed a low score from customers on satisfaction of promotions. A strong value proposition is important, but further discount is expected,” explains Livesey.
For wholesalers that don’t have their own private-label line, tapping into the range offered by buying groups is critical. We’ve highlighted the propositions offered by the five key buying groups in the UK, together with their best-selling, core-range lines and the strategies that promise to drive members’ sales in the year ahead.