Brand names losing their edge with consumers: study

A customer stands in a pasta aisle, carefully reading the label on a bottle of Classico’s Tomato and Basil sauce. They place it back on the shelf, shuffle over two steps, and repeat the process with the store's private-label equivalent.

For U.S. grocers, that’s likely a familiar story. Just over 75 per cent of U.S. shoppers regularly compare private-label and name-brand products, according to a recently-released study by Integer Group. For women, that number jumps to 90 per cent.

So which has the edge: store brands or brand names? While brand names remain popular in several categories, overall, their appeal seems to be fading.

The reason for this shift is the recession, reports Time Magazine. As wallets grew lighter, consumers discovered one of the simplest ways to trim grocery bills was to switch to private labels. They also learned a lower price doesn’t necessarily mean a lower quality product.

Time also writes that consumers have been impressed with no-name brands in blind taste tests. And they are hip to the fact that many store brands actually contain much of the same ingredients as their more expensive cousins, and are sometimes made by the same companies that manufacture brand name goods.

Grocers, for there part, are pushing generic products. Store-brand sales are often more profitable than national brands, so retailers are working hard to bring these products to market.

Here are some highlights from the “Private Label” report:

1) 44 per cent of men are happy to use generic health and beauty products while almost three quarters of women prefer band name alternatives.

2) Only 26 per cent of shoppers prefer brand milk and medicine over private label. In fact, some 68 per cent say they actually spring for store brand over-the-counter medication.

3) Coupons and sales help name brand products. “Of those who stick with name brands, 45% say they do so at least partly because they can find coupons for their brands (up from 35% in 2010), and 41% say their brand is often on sale (up from 36% two years ago),” with Time.

4) The biggest takeaway of all: today, 64 per cent of consumers agree with the statement 'Brand names are not better quality.' That's up from 57 per cent in 2010.