Inflation leading to an upsurge in popularity of own-brands, Nielsen figures reveal

Consumers are increasingly buying own-label products to combat the rising cost of groceries, according to new figures from market analyst Nielsen.

The data reveals that consumer spend on own-label products rose 5.5% year-on-year in the past three months, almost five times the growth in spend on branded products (up 1.2% year-on-year). The average increase in sales across all grocery products was 3.5%.

Own-brand sales are growing across all major food retailers but fastest at the discounters – Aldi and Lidl – and also at the Co-operative, Iceland, M&S and Tesco.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “Looking at what shoppers are putting into their baskets suggests food retailers are helping shoppers manage the impact of inflation by offering different ranges of own-label alongside brands across many categories.”

In addition, the proportion of consumer spend that went on items on promotion rose slightly to 28%, with almost 60% of these promotions being price cuts.

“This resonates well with shoppers, but may also indicate that the industry is leaning a bit more on short-term price cuts to help smooth inflationary price increases,” said Watkins.

The return of inflation means the market has now been in growth for more than a year, with all four of the biggest players (Tesco, Sainsbury, Asda and Morrison’s) experiencing year-on-year growth in the four weeks ending September 9, 2017.

However, the figures revealed that nearly two-thirds of households visit a discounter at least once every three months, partly due to the raft of new store openings.

Watkins said: “Consequently, the three main challenges are: to grow spend per visit faster; to encourage frequency of visit for different shopping missions and; to have inspiring media campaigns that help build loyalty through to the end of the year and the all-important Christmas shop.”

 

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