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NEW YORK — Consumer perceptions related to private-label products are "overwhelmingly favorable" across the world, according to a recent global survey performed by New York-based Nielsen.
Almost three-quarters (71 percent) of global respondents said store-brand quality has improved over time. Although price remains the primary driver of purchase intent among the majority (70 percent) of global respondents, quality is important, too. Two-thirds of surveyed consumers said they believe store-brand items offer extremely good value for the money spent.
In North America, store-brand share is 17.5 percent in the United States and 18.4 percent in Canada — just above the global average of 16.5 percent, Nielsen noted.
The social stigma associated with store brands has virtually disappeared in the region, as the majority of shoppers consider them a good alternative to name brands (75 percent of Americans, 73 percent of Canadians); a good value (74 percent of Americans, 66 percent of Canadians); and at parity with national brands on quality (67 percent of Americans, 61 percent of Canadians).
Still, since the recession ended, private-label dollar share in the U.S. increased only 1.3 percentage points between 2009 and 2013 as brands stepped up both promotional activity and innovation efforts to protect share positions and to drive growth, according to Todd Hale, consultant and former senior vice president, consumer and shopper insights for Nielsen U.S.
"To drive increased private-label growth, retailer focus and commitment are critical,” he said. "Best-of-breed retailers win by ensuring they offer the right product at the right price to deliver the right margin across the store in their given categories. Ultimately, retailers must understand shoppers' demand for both private and national brand products and categories."
Private-label share will continue to grow in North America, but growth will be slow and steady, Hale noted. "It is highly unlikely private-label shares will reach levels near those of the extreme private-label share countries," he said. Switzerland has the highest store-brand share globally.
Although many U.S. retailers likely expected store brands to have grown more during a soft economy, Hale said the slowdown in growth reflects, in part, less demand in some large store-brand categories.
"U.S. private-label sales in categories like milk, canned fruit and vegetables are significant, but sales are off as consumers are seeking what they perceive as fresher or new product alternatives," Hale told Store Brands, a sister publication of Convenience Store News. "Declines in these large categories, as well as others, are masking the successes retailers are having in smaller and newer private brand offerings — for example, in prepared snacks and meals, as well as in non-edible categories."
The Nielsen Global Survey of Private Label polled more than 30,000 Internet respondents in 60 countries to understand how consumer perceptions about private-label quality, value, assortment and packaging translate into sales around the world. The survey was conducted between Feb. 17 and March 7. Because Internet penetration varies by country, the company said it used a minimum reporting standard of 60 percent Internet penetration, or an online population of 10 million, for survey inclusion.
Click here to download the full report.