Insights

UK shoppers turn to supermarkets’ premium own-brands
Report

UK shoppers turn to supermarkets’ premium own-brands

Own-brands account for 54% of UK supermarket grocery sales; around 3x global average
 ‘Premium’ own-brand sales growing at almost 4x market rate
71% of Britons say quality has improved over time; 50% would buy more if greater variety available

Shoppers are becoming increasingly positive about retailers’ own-brand products, and this is contributing to a rise in sales, particularly for ‘premium’ versions.

Own-brand products accounted for 54%¹ of UK supermarket grocery sales in the year ending 21 June 2014. Sales of ‘premium’ own-brand products grew 5.2%² year-on-year, nearly 4x the rate of overall grocery sales (1.4%).

According to the Nielsen Global Survey of Private Label, which polled more than 30,000 Internet respondents in 60 countries, seven-in-10 (71%) UK respondents said the quality of own-brand products has improved. This compares to 62% of Europeans as a whole.

Let’s look at the data.  Six in 10 Britons said the quality of most own-labels is as good as name brands – nearly twice as many (34%) as four years ago. Furthermore, 42% said some own-labels are actually of higher quality than name brands. Only one-quarter (26%) believe own-label products are not suitable when quality matters.

Britons (37%) are less likely than Europeans (46%) to regard own-brand products as being for people on tight budgets or who can’t afford the best brand. Almost half (44%) would be willing to pay the same or more for an own-label brand if they like it – up from 28% four years ago.

The perception of own-label products has improved dramatically in recent years.  As with manufacturer brands, retailers have, over time, successfully built equity into their own-brand products by investing in product innovation, further developing ranges and increasing marketing activity.

Half of Britons would now buy more own-label products if a larger variety was available.

Britons have a much greater appetite for own-label groceries than shoppers in other markets around the world. While most grocery sales in the UK are own-label, in North America, it’s less than 20%; in developing countries, such as China, India and Brazil, it’s less than 5%; and in the Middle East, it’s no more than 1%.

Own-label most dominant in fresh foods

In the UK, the categories with the highest concentration of own-label sales are: Fruit & Vegetables (almost 100%)¹, Meat, Fish & Poultry (96%) and Delicatessen (80%); the lowest concentration is in Health & Beauty (18%), Confectionery (22%) and Alcohol (25%).

Even in categories where own-label products have their lowest share of sales, they still have a healthy – and growing – slice. The growth of ‘premium’ own-label offerings, which tap into shoppers’ increasing unwillingness to compromise over quality, means many own-brands are now a credible alternative for more and more items in today’s shopping baskets.

However, among the 33 product types covered in the survey, Britons are most willing to pay higher than average prices for toothpaste (32%), shampoo (30%) and deodorant (27%) – categories synonymous with big name brands.

Source:
¹Nielsen Homescan FMCG
²Nielsen Scantrack

About Nielsen Homescan
The Nielsen continuous 14,500 GB household panel is geo-demographically balanced and designed to measure household purchasing through a wide range of channels for food and drink.

About Nielsen Scantrack
The Nielsen scanning service that measures total store sales every week by SKU for 15,000 shops across all food and drink trade channels in GB. This uses the actual EPOS data from retailers, thus, Scantrack is the most robust and reliable measure of FMCG sales and is integrated with Homescan for the key indicators of retailer and category performance. The total market measured is £145bn per annum. ‘Grocery Multiples’ is a defined sub-set of the major supermarkets that also includes all food sales from Marks and Spencer (but excludes Aldi and Lidl). The Grocery Multiples account for over £121bn of all GB food, drink and supermarket general merchandise sales.

About the Nielsen Global Survey
The Nielsen Global Survey of Private Label was conducted between 17 Feb and 7 March, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 %. This Nielsen survey is based only on the behaviour of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion.