Australian shoppers turn to own label

17 August 2009

SYDNEY: Own label brands now account for almost a quarter of all sales in the grocery sector in Australia, a figure that has increased as consumers attempt to rein in their expenditure levels, Nielsen has found.

According to the research firm, the average Australian household spent A$172.80 ($144; €101; £87) on store brands over the three months to June, an uptick of 5% year-on-year.

This also constituted an increase from A$149.70 in the same timeframe in 2007, even though distribution levels have essentially remained constant over the intervening period.

Young families allocated the highest proportion of their grocery outlay to these products in the second quarter of 2009, at 25.8%, compared with an overall average of 22.9%.

A separate survey conducted by Nielsen in June reported that 57% of Australians had traded down to cheaper grocery brands in the last year to "save on household expenditure".

Just over a third of participants also argued they would continue to buy these lower-cost variants even when economic conditions improved.

Similarly, in a poll undertaken late last year, 60% of respondents agreed "today's Private Label products are much better than those available five years ago."

This sentiment reached a peak of 67% among 16–34 year olds, and fell to a low of 51% among contributors in their mid-fifties and above.

Kosta Conomos, executive director, retailer services, at Nielsen Pacific, said "retailers will increasingly look at the positioning of their private label strategy as a means of differentiating their store offer from that of their competitors, with the objective of driving loyalty to their retailer banner."

"When strong manufacturer brands meet strong retailer brands, the one that always wins is the one that has the strongest focus on the consumer."

Data sourced from Nielsen; additional content by WARC staff