Consumers turn back to brands in US

30 June 2010

NEW YORK: Many shoppers in the US are now displaying stronger preferences for specific brands than was the case last year, although a large number of consumers remain cautious.

RetailingToday, the industry title, has released the results of its annual survey of popular spending habits in America, which has been conducted every year for over two decades.

Its Top Brands study revealed that in 13 of 17 categories, including snacks, confectionery, grocery, electronics and toys, participants were exhibiting greater attachment to their favourite products.

The other four sectors – beverages, photo and film, cosmetics and health and beauty – saw scores on this measure either hold steady or fall very slightly.

Elsewhere, respondents routinely expected to find well-known goods made by firms like Coca-Cola, Nike, Sony and Kellogg's to be available when they visited big stores.

Contributors' requirements of retailers were actually close to reaching a peak when it came to the range of national brands they believed should command a place on their shelves.

As such, moves by chains like Wal-Mart to delist certain premium offerings that are deemed to be under-performing are unlikely to receive a positive response from customers.

These strategies, also adopted by some marketers that have dropped niche items within their portfolios, thus often come "at the expense of shoppers".

In concluding, RetailingToday warned the rise of own-label, typified by the relaunch of Wal-Mart's Great Value line and the introduction of Up & Up at Target would continue to pose a challenge.

A separate piece of analysis by BIG Research also showed that richer US consumers are feeling the effects of the sluggish economy, and are noticeably tightening their belts as a consequence.

Confidence among members of the organisation's panel with a household income of $100,000-plus (€82,268; £66,456) was higher than that of all adults, on 35.3% and 30.2% in turn.

The government's stimulus packages saw a temporary recovery in higher income households willingness to invest in new cars and trucks, but demand has moderated.

It also encouraged this group to splash out on home repairs, but the proportion of people planning to do so not changed since last year.

The only glimmer of hope is electronics, where 17.8% of wealthy individuals will buy a computer in the next six months, with 5.8% interested in digital cameras, 11.4% in TVs and 9.8% in appliances.

While this puts the intention figures for these product categories slightly up on the same period in 2009, they are still down on the pre-recession levels recorded in June 2007.

Almost 34% of higher-income consumers say they are keeping a closer eye on their budget, compared with 40% of the sample as a whole.

Some 44.5% of the former group are also looking to their "needs" rather than "wants", according to BIG Research.

House-buying intentions were up slightly for more affluent Americans, growing from 3.1% to 4% in the last 12 months. 

Data sourced from BIGresearch; additional content by Warc staff