Most UK groceries are now private label
As a proportion of supermarket spending, sales of own-brand groceries in the UK are about triple the global average, and premium own-brand sales are growing at about four times the overall market rate – 5.2% year on year, compared to 1.4% for grocery sales as a whole – according to market research from Nielsen.
The firm polled more than 30,000 internet users in 60 countries about their attitudes toward private label products.
“Shoppers are becoming increasingly positive about retailers’ own-brand products, and this is contributing to a rise in sales, particularly for ‘premium’ versions,” Nielsen said.
Indeed, own brand products have moved away from the plain packaging and cheap ingredients that used to characterise them. The research found that 71% of British respondents thought private label quality had improved over time, compared to 62% of respondents across Europe.
It also found that 44% of Britons said they would pay the same or more for an own-brand product if they liked it, up from 28% four years ago.
“The perception of own-label products has improved dramatically in recent years. 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,” Nielsen said.
The survey found six in ten British respondents said they thought own-label quality was as good as that of name brands, compared to 34% four years ago.
Even in categories where brands are dominant, like confectionery and alcohol, own brands are gaining a growing share, and half of British respondents said they would buy more own-brand products if a larger variety was available.
In other markets, private label holds a much lower share of the grocery market, at less than 20% in North America, less than 5% in China, India and Brazil, and about 1% in the Middle East.