Australian shoppers turn back to brands

27 September 2012
SYDNEY: Australian consumers are switching away from private label brands, in a sign that name brand alternatives could be gaining in popularity.

Data from market research firm Nielsen shows the penetration rate of private label brands in food retailers Woolworths and Coles fell to 94.8% in the third quarter, compared to 95.5% in the same period the previous year, The Sydney Morning Herald reports. This breaks a trend towards private label observed by Nielsen over the past five years.

Ever-increasing price cutting from name brand alternatives was seen by the researchers as a possible factor behind the change in buying habits.

"What appears to have happened is the price gap between branded offerings and private label diminished and people appear to have moved out of private label in certain categories," Nielsen executive director Kosta Conomos said.

As well as name brands becoming more price competitive, the report also noted that several years of fighting for market share via private labels have made those people who shop in Coles and Woolworths more price conscious overall.

Three years ago, less than half of shoppers were aware of the prices for products they bought on a regular basis, according to Nielsen data. But by 2012 60% of shoppers said they were aware of prices and discounts.

The price battle between the stores was also seen as having reduced shopper loyalty, with consumers now seeing little price differentiation between Coles and Woolworths.

The proportion of consumers who shop between both Coles and Woolworths rose from 87.9% in 2011 to 88.1% in 2012, Nielsen said.

Data sourced from the Sydney Morning Herald; additional content by Warc staff
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