They might be the President’s Choice or Master’s Choice, but a new study from New York-based Ipsos Marketing, Consumer Goods suggests that store brands in Canada and global markets are losing some of their lustre for consumers.
While the global study found that the majority of consumers still perceive store brands as equal to or better than national brands, it also revealed that positive perceptions of so-called private label brands dropped slightly between 2009 and 2010.
The findings are based on online interviews with 17,146 adults in countries including Argentina, Australia, Brazil, Canada, France, India, Russia and South Korea. Their answers were compared to those of 19,555 adults from the same countries that were interviewed approximately one year earlier.
While more than 80% of global consumers indicated a belief that store brands are the same or better than national brands, attitudes towards store brand attributes – a broad purview that includes “offering products I trust,” “offering high-quality products,” “offering unique products” and “offering innovative products” – all saw year-over-year declines.
The biggest declines in consumer attitudes towards store brands came in the areas of “offering environmentally friendly products” and “offering high-quality products,” with year-over-year declines of 6%. The study also produced declines in other attributes such as “offering food products that taste good” (-4%) and “having appealing packaging” (-4%).
In Canada, the study produced declines in consumer perceptions of store brands in 12 of 13 categories, with only one – “offer products that meet my needs” – remaining the same.
The most significant decline, 5%, came in response to the statement “offer innovative products,” which saw the number of people agreeing that store brands compare to national brands drop from 73% to 68%.
The Latin American nations of Mexico and Argentina were notable exceptions to the downward perception of store brands.
“Our data indicates that store brands still pose a strong challenge to national brands, but perhaps consumers are becoming a little bit more discerning about the benefits delivered by national brands,” surmised Gill Aitchison, president of Ipsos Marketing, Global Shopper & Retail Research, in a release. “We see that store brands, which initially distinguished themselves as being a low-cost alternative and evolved to offering what many consumers perceive as products comparable to national brands, are showing signs of vulnerability.”
Aitchison theorized that several factors might have contributed to the change in consumer attitude, most notably the fact that national brands “battled fiercely” against the onslaught of store brands. National brands also pushed particularly hard in the areas of innovation and sustainability – areas in which store brands are generally weaker.
The study’s findings are aligned with the May “Times and Trends” report from the SymphonyIRI Group, which indicated that dollar share growth among private label brands in the U.S. is slowing, and that unit share has taken a “negative turn.”
But while the Ipsos study paints a good news picture for national brands, Aitchison cautioned that attitudes towards store brands are tied in large part to the economy, which remains highly volatile.
To ensure continued success, he said, national brands should focus on the areas in which they are highly differentiated from store brands, primarily packaging, innovation and uniqueness. A focus on these areas, he said, will drive trust and quality perceptions among consumers.