'Good' Store Brand Products Important To Store Choice

But location and price are the leading drivers in the retailer-selection process.

"Good" store brand products play an important role in determining where consumers choose to shop, according to a consumer survey published in April by Boulder, Colo.-based Market Force Information. In fact, 38 percent of the survey’s respondents said the availability of good store brand products is a driving factor when choosing their preferred retailer.

Janet Eden-Harris, chief marketing officer and senior vice president of strategy for Market Force, found these results surprising.

"Consumers are becoming increasingly savvy about private label, but that knowledge varies quite a bit by category," she told Progressive Grocer's Store Brands.

For example, Eden-Harris said 90 percent of consumers are "aware of" store brand milk products; 60 percent know their grocer provides private label cleaning products; 86 percent "know of" store brand cereal; and 76 percent "know of" private brand snacks.

Adoption is "skewed still further," Eden-Harris added.

"Of those that know private label, 96 percent say they have bought private label milk; that drops to 71 percent of consumers who say they have bought private label cleaning supplies or cereal," she explained. "Eighty-one percent have bought private label snacks."

Eden-Harris also points to disparities in category usage, as consumers are "much more cautious" about adopting private label products when there is a big distinction between products in the category.

"Consumers typically can't tell the difference between milk from one producer to another, so private label adoption [in that category] is high," she said. "Cereals' and snacks' flavor and private label efficacy vary quite a bit, so private label adoption is much slower in these categories."

Eden-Harris also said promotions and coupons drive the highest adoption of store brand goods — far more than other reported inputs such as seeing a product on the shelf or receiving a recommendation from a friend.

Spotlight on location

But availability of good store brand products is not the main reason consumers shop where they do. According to the survey, 67 percent of respondents said their choice of grocer is primarily driven by the store's convenient location. Other driving factors included price (57 percent) and good sales/promotions (52 percent), which Eden-Harris found interesting.

"[The] attributes that consumers report caring a lot about and basing their store selection on are operational ones: courteous staff, quality produce ([which] ranks quite a bit higher than quality meat), fast checkout, one-stop shopping and accurate pricing," she said.

Only 5 percent of consumers said they shop at their primary grocer for its sustainable environment and green policies, the survey notes.

A top 10 table

The survey — conducted in March with 6,100 participants — also asked consumers to indicate which retailer captures most of their grocery dollars. Ten retailers topped the list: ALDI, Costco, Giant Foods, H-E-B, Kroger, Meijer, Publix, Safeway, ShopRite and Walmart. Participants then were asked to rank those 10 retailers on a number of attributes such as low pricing, cleanliness, service, food quality, location and the checkout process.

According to the survey, Batavia, 111.-based ALDI is viewed by consumers as the affordable price leader. Bentonville, Ark.-based Walmart and Issaquah, Wash.-based Costco ranked second and third, respectively, in the lowprice category. But scores suggested that consumers are not seeing the differentiation on price as clearly as the price leaders would hope.

Walmart ranked highest among respondents in offering a one-stop shop for all their needs, the survey notes. However, the retailer significantly underscored the mean in offering high-quality meat, produce, organics and courteous staff. Publix, meanwhile, scored highest in offering an inviting atmosphere and environmentally friendly policies. And some categories showed little retailer differentiation across the board, including "variety of merchandise and selections," "convenient location" and "good private label brands."

Although they didn't make the top 10 list, Monrovia, Calif.-based Trader Joe's and Rochester, N.Y.-based Wegmans Food Markets have highly satisfied customers who also are highly likely to recommend the retailers to friends, the report says. Other national chains that scored well on the "delight" scale include ALDI, Costco, Harris Teeter, Kroger, Publix and Target. According to the study, each company delivers great experiences that create advocacy.

Keep the customer satisfied

Speaking of experience, the survey explained that a majority of consumers are satisfied with their overall shopping experience. When asked to think about their most recent grocery shopping trip at their primary retailer, 90 percent of consumers said they were somewhat or very satisfied. But at the same time, 53 percent would not rank their preferred grocery retailer as a "5" on a scale of 1 to 5. The Market Force report says this reality exposes a huge opportunity for grocery retailers to delight their customers, rather than merely satisfy them.

On the other hand, only 10 percent of consumers said they were dissatisfied with their overall shopping experience, the report says. For those 10 percent of respondents, long wait times drove the most discontent. The second-most frequently cited reason was not being able to find a desired product. Nineteen percent of consumers said they are unhappy with the quality of their retailer's produce, and 15 percent said they are dissatisfied with the quality of meat products.

For more information, visit www.marketforce.com.