Bargains lining the supermarket shelves - NZ Herald

Private label supermarket brands are eating away at the grocery market and putting the heat on big brands in the battle for brand equity on supermarket shelves. The first global survey on the private label brands shows private label or supermarket own brands are gaining support among New Zealand shoppers. Marketing research and information company ACNielsen asked more than 20,000 consumers in 38 countries what they thought about private label brands in terms of quality, value for money, packaging and positioning. Overall, New Zealanders were in favour of the brands, with 385, or 77 per cent, of the 500 surveyed thinking they were a good alternative to other brands, compared with the global average of 68 per cent. But Kiwis liked them less than the highly developed private label markets of Netherlands (91 per cent), Portugal (89 per cent) and Germany (88 per cent) where private labels had evolved to become almost equivalent in quality and closer on pricing in the minds of consumers. However, New Zealand seems to be following suit. Private label brands have grown steadily here during the past three years to total more than $72 million worth of grocery sales. Private labels now account for 11 per cent of all scanned grocery sales - on a par with Australia but behind Switzerland (38 per cent), the UK (31 per cent) and Germany (27 per cent). About 80 per cent of Kiwi shoppers bought private labels during the four-week survey period in April and May. Private labels are present in 64 per cent of grocery categories and their annual growth of 4.7 per cent is on track with other big brands. The biggest growth was in alcohol, baby products, stationery and general merchandise. But the products enjoying the biggest growth in market share were paper products, chilled foods and bakery biscuits. ACNielsen New Zealand head of retailer services Geoff Smith said supermarkets were investing heavily to develop and expand private label products. They were also increasingly using "above the line" advertising such as TV and radio campaigns to promote them. "The question now is, are we training the Kiwi consumer to commoditise their shopping habits through lower price alternatives, such as private label, to the big brand leaders?" he asked. "Commodity categories favour this behaviour, perhaps aiding [German cut-price supermarket operator] Aldi's entry into markets such as Australia and when the time is right, New Zealand. "The challenge for product marketers is to strengthen loyalty through increased brand equity, protecting their brand and the category against private label." ACNielsen managing director Pacific and Japan Alistair Watts said the survey showed that the longer consumers were exposed to private label - in terms of years in the market and the greater their penetration in terms of total category volume sales - the better they thought about them. * The private label consumer survey was done as part of ACNielsen's twice-yearly global Online Consumer Opinion Survey, which polled more than 21,100 respondents in 38 markets, including Europe, the Asia-Pacific region, North America and Latin America. How private label supermarket brands rate: * Supermarket brands are a good alternative to other brands: Agree 77 per cent, disagree 7 per cent, neutral 16 per cent. * Supermarket brands are usually extremely good value for money: Agree 80 per cent, disagree 5 per cent, neutral 14 per cent. * Supermarket brands seem to have cheap-looking packaging which puts me off buying them: Agree 29 per cent, disagree 49 per cent, neutral 22 per cent. * Supermarket brands are meant for people on tight budgets who can't afford the best brands: Agree 22 per cent, disagree 58 per cent, neutral 20 per cent. * The quality of most supermarket brands is at least as good as those of usual big brands: Agree 72 per cent, disagree 14 per cent, neutral 14 per cent.