Couponers have long advised that, by shopping the sales and clipping coupons, you can save a lot more on your groceries than you can by buying lower-priced store brands. But many shoppers apparently haven’t gotten the message.
New consumer research finds that more shoppers are turning to store brands as a money-saving tactic – and they plan to do so even more in the future.
Market research firm IRI recently released the results of its latest “Consumer Connect” survey. It found that more than half of shoppers consider themselves price-sensitive and generally purchase the lowest-priced option when buying groceries. Slightly more than half use coupons on name-brand products as a money-saving strategy, while 84% opt for lower-priced private label products instead. About two-thirds of shoppers say they plan to increase their purchases of store brand products in the latter half of this year.
Survey respondents told IRI they’re doing better financially, but they’re still cautious. “People are opening their wallets more and spending, but they are still very selective about what they will spend their money on,” IRI vice president of Thought Leadership Susan Viamari said.
But some shoppers aren’t just trading down and reluctantly settling for store brand products – many are happy to make the switch from more expensive name brands.
“The Power of Private Brands”, a separate report by IRI and the Food Marketing Institute, found that store brands don’t carry the stigma they once did. Younger shoppers in particular are “too young to have lived through an era when private brand had a more negative connotation as ‘generic’,” the report notes.
That’s part of the reason store-brand sales soared to $138 billion last year, up 4% from the previous year, representing 16.4% of all grocery dollars spent. Nearly all shoppers – 97% – said they buy at least some store brands, with younger shoppers more likely to stray from national brands. Nearly three-quarters of millennials said they feel good about saving money by purchasing private label products.
But even they have their limits. It seems not all private label products are created equal.
When asked what specific private label products they will buy, about two-thirds said they’re happy to buy store-brand hamburger and hot dog buns, while only a third find store-brand ice cream to be satisfactory. That’s because they consider bread to be pretty basic, but ice cream more specialized. The ice cream category “is known for new flavors and trends, in addition to hip, emerging brands,” the report notes. “That is likely why millennials are significantly less open to purchasing private brands in this category.”
How much do store-brand shoppers really like their store-brand purchases, though? Is it all about saving money, or do they really prefer the private label products to the name brands?
As it turns out, the survey found that only 10% of shoppers consider private brands to be better than national brands. But the report portrays that as a positive. “Historically, the goal of private brands was to meet the quality standards of national brands, rather than exceed them,” the report reads. “In this light, the fact that even 10% of consumers now consider private brands as better could be viewed as a positive development that indicates retailer strategies are beginning to work.”
Whether you prefer name brands, store brands, or you’re indifferent, there’s no denying that buying private label products is a good way to save money. But dedicated couponers will tell you it’s not necessarily the best way. As more shoppers buy store brands, though, national brands may try to steal back some market share by – you guessed it – offering more coupons and promotions.
So for shoppers interested in saving money, no matter their strategy – everyone may win in the end.
Image source: Walmart
There is a lack of FOOD coupons. Food to put on the table to eat. Not makeup, not products for hair, not vitamins, not health products, but FOOD. If I need XXX veggie for the table, I’ll buy whatever is cheapest if none on sale and no coupons available.