Canadians seeking deals, not necessarily store brands

When it comes to buying behavior, Canadian shoppers currently are in deal mode, according to Carman Allison, vice president, consumer insights for New York-headquartered Nielsen. In fact, 85 percent of Canadians say they are trying to stock up during promotions, while 74 percent say they are buying items only when they are on sale.

And although more than half of Canadians are trying to save on expenses, they are not necessarily looking to store brands as a savings strategy. Speaking on Oct. 13 at Store Brands' 2015 Collaboration Summit in Miami, Allison said 52 percent of Canadian consumers say they now rely on store brands as a way to save on expenses, but that number is down from 57 percent in 2011.

In reality, 36 percent of consumer packaged goods (CPG) items currently are being purchased on deal, he added. And unit consumption remains relatively soft, similar to what is being seen in the United States.

Canadians' deal-seeking behavior is playing out in their channel choices, too. The discount format is up in terms of share of wallet, now accounting for 42 percent, while conventional formats are losing ground.

"Discount is where it's growing right now," Allison said.

Although private brands are lagging overall CPG growth right now, they boast 100 percent penetration among Canadian households, he added. But the gap has narrowed between Canada and the United States in terms of private label share of dollar sales: 18 percent in Canada versus 17.7 percent in the United States.

Within Canada, store brand growth varies by geography. It is highest in Western Canada, where consumers are very value-driven and boast less out-of-home meal consumption and lowest in French-speaking Quebec, Allison said. The top influencers for private label within Canada, in order of importance, are price, trust/experience, product label and in-store displays.

The good news for store brands is Canada is that they are growing in two major retail chains: Costco and Walmart. And private brands are underdeveloped within Walmart, he noted. Moreover, 70 percent of Canadians consider store brands to be good alternatives to the national brands, while 63 percent believe they are equal in quality to the national brands.

"There's a lot of positive attitudes towards store brands right now," Allison stressed.