Product prices usually cause consumers to pick one brand over another, according to a survey conducted for SN by America's Research Group, Charleston, S.C. Of 1,000 consumers surveyed, 54% cited price as the feature that most often influences which brand they choose.
Retailers polled by SN agreed that price is a determining factor in buying Center Store products. While brand loyalty exists, they said most consumers make purchasing decisions based on how much an item costs.
"People are very price-conscious," said Pat Hudson, grocery buyer at Byrd Food Stores, Burlington, N.C. "There's some brand loyalty out there, but lots of times it's the price." Some retailers said consumers' propensity toward national brands depends on their socioeconomic status. But others said income levels are irrelevant, stressing that most consumers, regardless of their economic status, are more price-conscious these days.
"It doesn't matter whether people have lots of money in the bank or are trying to pay their bills on a weekly basis; everyone likes to save money," said Tom Hughes, director of marketing at Clemens Markets, Kulpsville, Pa. To help do this, many consumers opt to buy private-label products.
According to the survey, 53% of consumers purchase private-label products sometimes, while 32% buy them regularly.
"People are starting to see that there's no difference in the quality of product from the brand names to the private labels," said Roger Lowe Jr., vice president of operations at Pay-N-Save, Littlefield, Texas.
Second to price, quality was cited by 35% of consumers surveyed as a determining factor when purchasing Center Store items. The quality of many private-label products, according to retailers polled by SN, is now on a par with national brands, which should entice more customers to make private-label purchases.
"Most chains now carry a quality private label, and it's still at a good value to the consumer," said Hudson. One of the reasons consumers are choosing private label is that they perceive it to be quality merchandise.
"When you put your corporate name on the label, your reputation is on the line, thereby assuring the customer of both price and quality," said David Scully, director of operations and merchandising at Camellia Food Stores, Norfolk, Va.
According to a study conducted by Gallup Organization for the New York-based Private Label Manufacturers Association, more than seven out of 10 consumers agree that store brands offer the same quality as national brands.
Hughes of Clemens said the success of private-label products often depends on how the retailer positions itself in the marketplace.
"Some retailers will bring private label in and use it as a low-ball [pricing]," he said. "Other retailers will bring it in as a medium quality and medium price, and others will try to establish it as a high-quality item comparable to the national brands."
According to 35% of consumers polled, the quality of store-brand products has improved slightly over the last two years; 45% said it has remained the same. Meanwhile, 58% of consumers said that their private-label purchases have remained the same.
Most retailers said the quality and selection of their private-label products have improved over the past two years.
"We've made a conscious effort to make sure the quality's there, and when it hasn't been, we've changed where we get our private label from," said Lowe of Pay-N-Save, which has introduced a variety of new private-label items.
The Price Factor
Consumers aren't as brand loyal as manufacturers may hope. According to SN's consumer survey, the majority of shoppers say price is more important.
What Causes You To Pick One Brand Over Another? (Chart) Source: America's Research Group
Brand Preferences
Consumers said store brands have the same value as national brands in a variety of different categories, including canned goods. However, they placed more emphasis on branded products in categories like soda.
Rate Value Of Store Brands Compared With National Brands (Charts) Canned Goods, Soda
The perceived quality of private-label products across categories can vary, according to a consumer survey by America's Research Group, Charleston, S.C.
In frozen vegetables, 65% of consumers said the quality of private-label offerings is equal to their branded counterparts, while in canned goods, 63% said private label is equal to brands. "Two areas that private label has had their biggest share of the market for decades would be canned goods and frozen vegetables, so it's not surprising that two-thirds feel it's better," said Brian Sharoff, president of the New York-based Private Label Manufacturers Association.
When choosing diapers, however, most consumers opt for the national brands: 41% of respondents said private-label diapers are not as good as those offered by national manufacturers.
"I don't carry private label [diapers] because I can't sell them," said Ed Vargas, grocery, dairy and frozens buyer at PW Supermarkets, San Jose, Calif.
