UK shoppers turn to supermarkets’ premium own-brand
- Own-brands account for 54% of UK supermarket grocery sales; around 3 x global average
- ‘Premium’ own-brand sales growing at almost 4x market rate
- 71% of Britons say quality has improved over time; 50% would buy more if greater variety available
London, 27 November 2014 – Shoppers are becoming increasingly positive about retailers’ own-brand products which is contributing to a rise in sales, particularly for ‘premium’ versions, according to a new study from global information and insights company Nielsen.
Own-brand products accounted for 54%¹ of UK supermarket grocery sales in the year ending 21 June 2014. Sales of ‘premium’ own-brand products grew 5.2%² year-on-year, nearly 4x the rate of overall grocery sales (1.4%).
According to the Nielsen Global Survey of Private Label, which polled more than 30,000 Internet respondents in 60 countries, seven-in-10 (71%) UK respondents said the quality of own-brand products has improved. This compares to 62% of Europeans as a whole.
Six in 10 Britons said the quality of most own-label brands is as good as name brands – nearly twice as many (34%) as four years ago. Furthermore, 42% said some own-brands are actually of higher quality than name brands. Only one-quarter (26%) believe own-brand products are not suitable when quality matters.
Own-brand products
Britons (37%) are less likely than Europeans (46%) to regard own-brand products as being for people on tight budgets or who can’t afford the best brand. Almost half (44%) would be willing to pay the same or more for an own-brand if they like it – up from 28% four years ago.
“The perception of own-brand products has improved dramatically in recent years,” says Nielsen’s UK head of retailer and business insight, Mike Watkins. “As with manufacturer brands, retailers have, over time, successfully built equity into their own-brand products by investing in product innovation, further developing ranges and increasing marketing activity.”
Half of Britons would now buy more own-brand products if a larger variety was available.
Watkins comments: “Britons have a much greater appetite for own-brand groceries than shoppers in other markets around the world. While most grocery sales in the UK are own-brand, in North America, it’s less than 20%; in developing countries, such as China, India and Brazil, it’s less than 5%; and in the Middle East, it’s no more than 1%.”
Own-brand most dominant in fresh foods
In the UK, the categories with the highest concentration of own-brand sales are: Fruit & Vegetables (almost 100%)¹, Meat, Fish & Poultry (96%) and Delicatessen (80%); the lowest concentration is in Health & Beauty (18%), Confectionery (22%) and Alcohol (25%).
Watkins adds: “Even in categories where own-brand products have their lowest share of sales, they still have a healthy – and growing – slice. The growth of ‘premium’ own-brand offerings, which tap into shoppers’ increasing unwillingness to compromise over quality, means many own-brands are now a credible alternative for more and more items in today’s shopping baskets.”
However, among the 33 product types covered in the survey, Britons are most willing to pay higher than average prices for toothpaste (32%), shampoo (30%) and deodorant (27%) – categories synonymous with big name brands.
