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Could Supermarket Own Brands be in For a Shock?

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Could Supermarket Own Brands be in For a Shock?

Could Supermarket Own Brands be in For a Shock?
June 24
09:07 2013

UK sales of supermarket own-label products increased by 38.7% between 2008 and 2012, after observing year-on-year growth over the past 5 years, according to ‘Supermarket Own Brands’, a new Market Assessment from market intelligence providers Key Note,

The continued economic downturn and a return to recession in early 2012 has fuelled growth across the own brand market in recent years, particular within value ranges, such as essential Waitrose and Sainsbury’s basics. Discounters, such as Aldi, Lidl andIceland, have also enjoyed healthy growth in recent years, with figures compiled by Kantar Worldpanel, in the 12 weeks ending 20th January 2013, revealing that Aldi had observed the strongest growth over the past year, with its share of the market increasing by 0.6 percentage points between 2012 and 2013 to reach 3.1%.

Ongoing economic pressures, combined with continued increases in food price inflation, has seen the cost of food rise by 32% since 2007, according to statistics compiled by the Department for Environment, Food and Rural Affairs (Defra). These factors have encouraged a significant proportion of consumers to switch from branded goods to supermarket own-label ranges, in a bid to save money. Continued investment and new product development (NPD) across private labels has also helped to improve the quality and reputation of own-brand goods, which up to about a decade ago were often thought of as cheap and low-grade.

Indeed, according to the results of an exclusive consumer survey conducted on behalf of Key Note in February 2013, almost 90% shoppers had purchased supermarket own brand food products over the past six months, while almost 60% had purchased own brand drinks. Further to this, over half (52%) of the respondents revealed that they had increased their purchases of supermarket own brands since the start of the economic crisis, in a bid to save on their weekly grocery shop.

Supermarket own brands are expected to continue to dominate the grocery market over the next five years, with the market share of such products expected to remain above 50% for the foreseeable future. However, it will remain to be seen how the industry deals with current problems, such as the horsemeat scandal, which has affected almost all major grocery retailers in the UK in recent months. Already, market figures are suggesting that sales of beef-based products, particularly ready meals and processed meat, have declined within supermarkets, with many consumers turning towards their local butcher or opting for meat-free alternatives instead. Furthermore, the return to economic growth following the double-dip recession could result in consumers turning back towards the well-known brands that they used to enjoy pre-recession, particularly as confidence and spending returns.

Key Note’s 2013 Market Assessment, Supermarket Own Brands, is available to purchase from Key Note on 0845-504 0452, by e-mail at sales@keynote.co.uk or at www.keynote.co.uk, priced £575.

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