Gain in ‘Frequent’ store brand Shoppers.

A new consumer research study by the Private Label Manufacturers Association shows that more and more shoppers—a record 41% of those surveyed—now identify themselves as frequent purchasers of store brand products.

The news could have important implications for national brand manufacturers and retailers, as the popularity of private label keeps growing with American consumers. Latest market statistics show that store brand products, those items that retailers put their own name or their own brands on, now account for over $50 billion in annual sales, and virtually one-in-five items sold in U.S. supermarkets, drug stores and mass merchandisers today is a store brand.

The increase in frequent purchasers of store brands represents a significant gain from five years ago when just 36% of shoppers said they were frequent private label shoppers and an extraordinary shift from 15 years ago, when only 12% of consumers polled said they brought store brand products frequently, said Brian Sharoff, PLMA President.

This gain in frequent private label shoppers was one of several key findings from research which was conducted among more than 1,000 shoppers by Ipsos-MORI, an international consumer polling organization. The survey is the latest in a series of PLMA consumer research reports that have been published every five years since the early 1980s.

Not only did this latest research find that the number of frequent purchasers of store brands is increasing, but also that these products are appealing to more affluent shoppers. Consumers in the middle-income ($30,000-$75,000) and higher-income (over $75,000) brackets are much more likely to buy a larger amount of private label in the coming year than those in the low- income (under $30,000) bracket, according to the data.

The reasons underlying these substantial changes in consumer shopping are identified in the PLMA report. Almost seven of ten shoppers in the study agreed that the private label products they buy are as good, if not better, than their national brand counterparts, a substantial increase from five years ago when a little more than half of the respondents said they agreed with the statement.

This growing confidence in the quality of store brand products points to even more growth in the future. Almost two-thirds of respondents said they would buy more private label in the year ahead if their store offered a greater variety of items, and six in ten said they would do so if their stores introduced new and innovative private label products. Eight of ten said that their past satisfaction with supermarkets’ or grocery stores private label products would encourage the purchase of more private label in the year ahead.

The increasing popularity of store brands comes at a time of a profound change in consumer shopping habits. The frequency of regular of store visits is declining and the amount of money spent is being more widely distributed than ever. Only 64% of U.S. consumers said they shop weekly or more often, down sharply from 77% in 2001 and 88% in 1996.

At the same time, Americans are shopping in more kinds of stores, especially non-traditional formats and in fewer conventional supermarkets. “The research reveals growing penetration for the rapidly growing value-added, specialty food stores, such as Whole Foods and Trader Joe’s,” Sharoff said. Mega-retailers, such as Wal-Mart and Costco are also becoming much more important with nearly half of all shoppers saying they shop at supercenters (discount stores with full grocery departments) or warehouse clubs.

The study also indicates that the popularity of store brands in grocery stores is having a halo effect in other store formats. Store brands are poised to spread further beyond supermarkets and specialty food stores into non-grocery outlets such as Home Depot or Staples, or even the Internet. About one-fifth of all consumers reported that they already frequently buy the private label versions of health and beauty products, home office products, household products, and home improvement products regardless of the type of stores in which they are sold.

Other key findings of the research include:

– Almost half of those interviewed said their regular shopping basket now contains one-quarter or more of store brand products.

– Nearly four in ten consumers reported that they are now more aware of supermarket private label products than they were a year ago, and almost half indicated that their awareness is greater now than it was five years ago.

– By some measures of consumer purchasing, store brands in the U.S. are reaching the same level as in Great Britain, long considered the strongest national market for private label. This suggests that store brands in the U.S. may eventually reach British store brand penetration, which now surpasses 40% of retail sales, twice as high as in the U.S.

To download study CLICK on link (Adobe Acrobat Reader required):

http://www.plma.com/2006%20US%20Mori%20Report/PLMA%20MORI%20Report_BSharoff.pdf>