As brands face increasing competition from supermarket own label products, our Head of Planning, David Howard, looks at current shopping habits and how brand owners can capitalise on the shift in shopper’s attitudes.
Most of us have a favourite brand that we’ll resist replacing with a cheaper supermarket own-label product regardless of the price difference. For some of us this ‘protected product’ might be Moet et Chandon Champagne, for others it might be Marmite. There are those of us who would never give up Pepsi or Coke for Sainsbury’s Cola, whilst others would baulk at forsaking their Doritos for Tesco Cool Tortilla Chips.
On the whole, though, the previous domination of branded products in the kitchen cupboard has been eroded in favour of own label alternatives. Thanks to the economic environment of the past five years, shoppers have been forced to think more carefully about the cost of their choices. Food prices have rocketed as living standards have fallen. Many have traded down one or two notches in the products that they buy, choosing to pick up an own label product rather than a more expensive branded one. The pennies saved across the shopping basket can then be spent on those must-have protected products.
As a result of this shift, supermarkets have rammed home the low-price message in an almost continuous price war for the past five years, spending the best part of half a billion pounds to prove which has the lowest price – even if it turns out that lower prices often mean a difference of as little as 1p. But there is evidence that this obsession with cheapness, particularly where food is concerned, is starting to put shoppers off, even those on low incomes.
Asda discovered two years ago that simply hammering home a low price message gave the impression that food quality is secondary. Subsequently, the Walmart-owned chain created an M&S-style ‘food porn’ campaign proclaiming the provenance and quality of its products. Now Tesco boss Philip Clarke says that the era of cheap food is coming to an end and the chain has launched a campaign promoting the quality, as well as the price, of their own label products. This is partly to undo the damage to Tesco’s reputation of the horsemeat scandal which has alerted people to some of the basic facts of life – you get what you pay for.
Tesco’s Price Promise ads – where the chain claims its own label products are cheaper than rivals – was almost an own goal for the brand after Sainsbury’s complained to the ASA that Tesco’s ads were misleading because any comparison of own label products must take into account the provenance, quality and ethical values of the goods. The ASA sided with Tesco but Sainsbury’s has since launched an ad to demonstrate that its own label goods have higher ethical and sourcing standards than those of Tesco.
Brands should be prepared for a sea-change in attitudes to food, which is partly driven by the continuing rise of celebrity chefs and TV programmes from The Great British Bake Off to MasterChef, showing that the British public are becoming more conscious of what’s in their food and how it’s made. According to market research company SPA Future Thinking’s Shopper Barometer survey, the flight to own label may have slowed and could actually be going into reverse in some areas. “Actually, there are signs of a plateau. Many shoppers have traded down in so many areas that they are now trading back up in some categories,” says the company.
Shoppers are saving money on functional products so that they can spend more on their personal protected products. They still want to see new, interesting products when they shop and are prepared to spend more on brands offering a benefit that own-label does not, even if this benefit might be purely emotional. As the competition between brand and own label becomes more fierce, brand owners have to give consumers clear reasons to believe why they should balance their baskets to accommodate their personal ‘protected products’. At a time when trust in supermarkets is patchy and we have become increasingly concerned with making healthy, sustainable, and ethical choices, shoppers still crave carefully-crafted quality brands. And if brands are able to prove why they’re a better choice for the discerning shopper, consumers will reward them with their loyalty once more.
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