Spend on private-label products is growing at close to five times the rate of spend on branded products in the UK market, new research from Nielsen has found.
Over the last three months, consumer spend on private-label products rose by 5.5% in the UK market, while spend on branded products rose by just 1.2%.
The average sales increase across all grocery products was 3.5%.
“The return of inflation means shoppers are increasingly turning to supermarkets’ own-label products to help manage their weekly grocery spend,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “Own-brand sales are growing across all major food retailers, but fastest at the discounters – Aldi and Lidl – and at the Co-operative, Iceland, M&S and Tesco.”
Promotion-Hungry
In addition, consumers are more eager to spend money on items on promotion, which now account for 28% of all purchases, according to Nielsen. “[Approximately 60% of these promotions are price cuts, something that] resonates well with shoppers, but may also indicate that the industry is leaning a bit more on short-term price cuts to help smooth inflationary price increases,” said Watkins.
This hunger for promotions also means that nearly two thirds of households now visit a discounter at least once every three months – a factor that is also being hastened by the increase in both Aldi's and Lidl's store counts.
“Consequently, the three main challenges are: to grow spend per visit faster; to encourage frequency of visit for different shopping missions; and to have inspiring media campaigns that help build loyalty through to the end of the year and the all-important Christmas shop,” Watkins noted.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
