As Shoppers Watch Grocery Budgets, Marketers Worry About Private Brands
As consumers continue to look for ways to save when they shop for groceries, a majority of product marketers said the biggest threat to their brand is private label products, according to a new study from Ibotta.
With 72% of respondents to the State of Spend report saying economic conditions have impacted their grocery shopping habits, many consumers have turned to store-brand products to save money. In fact, 75% of shoppers in the survey said they would try a different brand if it offered a lower price than the product they usually purchase while 64% also said price is more important than the brand name of the product.
“This year’s State of Spend highlights the ongoing consumer struggle to overcome the compound effects of years of high grocery prices and stagnant shopper budgets, leading to growth in lower-cost private label brands,” said Bryan Leach, founder and CEO of Ibotta. “If shoppers take an exit ramp to a private label product, brands understand that the cost of inaction is steep.”
In the survey, consumers said they are spending more on essentials and less on other products. Shoppers reported spending an additional $302 on food and beverages and cut spending on categories such as personal care/beauty, pet care, health, alcohol, and cleaning/household.
While consumers in the report said they cut spending on categories outside of food and beverages, figures from Circana that were released in June by the Private Label Manufacturers Association show growth in private label sales in many of the categories shoppers said they were making cuts.
Circana figures covering a 52-week period that ended June 16, show liquor sales up 8.8%, pet care up 5.8%, home care up 6.8%, and home products sales up 1.7%. All figures represent private label products in each category. Additional data from Circana released earlier this year showed sales of private label beauty products during the year’s first quarter were up 7.9% in dollars and 2.1% in unit sales.
The Ibotta report, which also surveyed product marketers, found that 70% said the biggest threat to their brand is private label products.
