The percentage of consumers that consider themselves private-label loyalists – i.e. those that buy private label more than 75% of the time – is now equal to those that consider themselves loyal to national brands, a new study by IRI has found.
According to the study, Private Labels: Hiding in Plain Sight, around 50% of shoppers now switch between brands and private label, with a high proportion of 'switchers' in the mid-income bracket, due to the growing cost of living crisis.
The study also found that a high proportion of private-label customers are now looking beyond price, with private labels evolving into strategy-focused, differentiated, data-driven and consumer-obsessed brands.
“Private labels may not be instantly recognisable brand names, but the fact is they don’t need to be," said Ananda Roy, report author and International Senior Vice President, Strategic Growth Insights at IRI.
"Retailers have re-imagined what consumers can expect from them in every supermarket aisle. They offer considerable value to shoppers who are not entirely price-driven by delivering quality, product performance and premium innovations, which are comparable to the bigger, more established national brands."
On a global level, private label now occupies a category footprint of 16.5%, with some markets considerably higher than others – in Spain, for example, penetration stands at 44%, while in Germany, it is 38%.
On a European level, private label penetration stands at 35%, making it a €194 billion industry. In Germany alone, private label accounts for around €60 billion in sales.
Commenting, Roy added that private labels increasingly "compete for growth and margin on near equal terms and often present worthy competitors that are perhaps not fully acknowledged by the big brand owners. Private label brands are basically hiding in plain sight.”
The full IRI report can be found here.