Customers seek balance of national and private-label brands: Research

A new report from Acosta has found that shoppers look to different brands to meet various needs, and seek balance between private label and national brand offerings.

"National brands continue to dominate, with a worth of over US$558 billion in 2017, compared to $124 billion for private label brands," the latter of which are typically positioned as lower-cost alternatives to national brands, noted John Clevenger, managing director and SVP, strategic advisors at Acosta.

A study of more than 100 retailers revealed the retailers growing both national and private label brands are experiencing the best overall growth, "proving that a strategic mix is key," he added.

Among the findings of Acosta’s 2018 “Why Brands Matter” report:

• Though there are several reasons shoppers may opt for a private label brand, cost savings is the primary driver.


• Many shoppers consider buying private label items a compromise; overall, they view national brands to be superior to their private label brand counterparts in most categories.


• Shopping trips driven by national-brand purchases are more valuable than private label brand trips on average by 65%.


• In general, the more personal, innovative and differentiated the category, the more likely a shopper will select a national brand over private label; almost all of the categories for which shoppers said they “exclusively” or “mostly” purchase private label tend to contain staple items that are consumed, while several of the categories for which consumers “exclusively” or “mostly” bought national brands were body care products.


• Value is one of the fastest-growing channels, but while the value channel places a large emphasis on private label, this isn’t necessarily what’s spurring shopper traffic: Shoppers noted that the highest influencers driving them to the value channel are best everyday prices (49%), better value for their money (47%) and cost savings/help with budget (45%).


• Further, the value channel has limited appeal among a limited base of fans, with shoppers who frequent the grocery and mass/super channels finding that value retailers fall short in the areas of fresh food, convenience and promotions.

“To craft the best possible brand strategy, use research and analysis to help strike the right balance with national and private label brands in each department and category,” said Clevenger. “A clear takeaway for retailers is that they should understand the different roles national and private brands play.”

“Why Brands Matter” was completed via an online survey of Acosta’s customer shopper community panel, in addition to Nielsen research reports.

A version of this article appeared at ProgressiveGrocer.com.