As prices have risen, many shoppers who’ve tried store brand grocery products have discovered they’re actually pretty good. And for most shoppers who are trying to save money, “pretty good” is good enough. But coupons and sales would make them even better.
That’s what shoppers have told FMI – The Food Industry Association, in its new report “Power of Private Brands 2024: What’s Ahead for Shoppers and Private Brands.”
The report found that shoppers are buying more store brands, they’re happier with their store brands, they plan to buy more store brands – but there’s still some room for improvement.
Fully 94% of shoppers said they purchase store brands at least occasionally. 55% have been buying more store brands over the past year, and 46% expect to buy more in the year ahead. “While inflation is an important driver of private brand purchases,” the report stated, “the reasons for increased buying go beyond price.”
Nearly three-quarters of those buying more store brand products say it’s because they’re less expensive, or they provide a good value. But attributes like quality and taste are increasingly important, with more than a third of shoppers saying those factors impact their purchasing decisions.
While shoppers appear happy with store brands’ quality and taste – happy enough to continue buying them, at least – they’re not necessarily ecstatic. Among those who said quality impacts their purchases, “close to half of shoppers perceive private brands as having the same or better quality as manufacturer brands,” FMI noted. But phrased a different way, that means more than half of shoppers don’t. 54% said they buy store brands because their quality is “good enough” compared to name brands.
While store brand sales are indeed on the rise, “good enough” isn’t exactly a ringing endorsement. So what can store brands do to improve their reputation, and get shoppers who are merely resigned to buying store brands more excited about it?
“Even though these brands are known for good prices and deals, shoppers point to opportunities for continued improvement,” the report reads. When asked how their stores can make their private brands more appealing, shoppers offered suggestions like “better coupon or deal offers,” “do BOGO sales occasionally,” and “better sales and discounts.” Store brands are typically less expensive than their full-price name brand equivalents. But when those name brands are on sale, their prices are often better. So there’s no reason for store brand products to have a permanent everyday price, take it or leave it. If retailers offer the same kind of deals on their own brands as frequently as they do for national brands, more shoppers are willing to give them a try.
When asked other ways that stores might make their own brands more appealing, shoppers were hesitant to suggest major changes, for fear those changes could lead to higher prices. “Maybe better packaging,” one shopper suggested, “but not at the expense of pricing.” Another said, “I think store brands are fine the way they are; more appealing might mean more expensive.”
So “good enough” might really be good enough. If quality or taste or packaging get any better, and prices rise as a result, a better store brand might actually become a worse choice. So any retailer seeing the increased sales of store brands, and considering improvements to help boost those sales even higher, needs to “navigate the complex balance between price and quality,” the report advises.
Overall, the best indicator of store brands’ growing popularity – regardless of whether shoppers love them, or just accept them for what they are – is that more than half of survey respondents said they expect to continue buying store brands even if grocery prices fall. “This indicates that shopper loyalty to these brands has grown and is no longer based just on price,” the report concludes.
But for many shoppers who opt for store brands, lower prices are kind of the point. And if stores would offer more coupons, deals and sales on their private label products – then even lower prices could make their brands even better.
Image source: Stop & Shop
