CHICAGO According to research coming out of Information Resources, Inc. Tuesday, financially-strapped consumers across all income levels, including those earning $100,000 or more, are turning to private label as part of a money-saving strategy.
“With budgets strained to the breaking point, shoppers are scrambling for ways to save money,” stated IRI consulting and innovation president Thom Blischok. “Shoppers are looking through a lens of affordability and have a re-invigorated interest in private label since the economic turmoil began. The need for affordable packaged goods solutions is high, and private label products are going a long way toward answering that need.”
Private label is performing well across channels, but drug retailers are leading the way in growth, IRI stated.
On average, private label products cost about 30 percent less than their name brand counterparts. That discount varies greatly, though, at the department level. For instance, the average private label fresh/perishable item costs only 3.5 percent less than its branded counterpart, but in the beauty/personal care department, consumers can save nearly 64 percent versus a branded product.
Though nearly everyone purchases some private label products at some point, a notable 33 percent of shoppers are considered heavy buyers of private label goods. While significant opportunity remains, this is a substantial increase versus last year when 28 percent of shoppers were considered heavy buyers.
“The evolution of the U.S. private label market has accelerated in the face of growing financial turmoil,” Blischok said. “As shoppers opt out of some products and stores, they will opt into others. It is critical for the ongoing success of CPG manufacturers and retailers to not only react to, but anticipate these trends and be ready with products, assortments and store layouts that meet the shopper’s changing needs.”