About two thirds of shoppers believe the quality and innovation of own label goods are on a par with branded goods and more than two thirds say own label is better value for money than branded.
This was the shock finding of a survey of almost 2,000 consumers carried out exclusively for The Grocer by Harris Interactive last month.
The survey presents a fascinating insight into changing attitudes towards supermarket own label offers and underscores how much of a threat own label has become to branded suppliers.
Indeed, shoppers estimate that own label accounts for as much as a third of their baskets and trolleys, the survey indicates.
Caroline North, senior marketing executive, says the research suggests that own label is in rude health when measured in terms of quality, value for money and innovation against its branded competition.
"These are the factors that have contributed to consumers buying brands over own label. It is not just about price," she says.
"Consumers are fully aware that if price was the only motivation then own label would be winning. But as we are aware, there are other attributes that come into play, such as quality and innovation. This is a wake-up call for the brands."
As the multiples have shifted from pure value into mid-price and premium territories with their own label ranges, so the perception of the quality of own label has changed. Respondents who regard own label as the same quality as branded typically have a shopping basket that contains a massive 40.8% of own label items.
However, although the multiples have not been slow to recognise the opportunities, particularly at the premium end of the spectrum ('Own label at a premium', The Grocer, March 25, p10), not everyone is as convinced about the quality of own label. Those who believe that own label is of lower quality only buy an average 22.8% of own label products. Where quality is felt to be poor there is a reluctance by shoppers to buy own label products instead of branded alternatives.
At Morrisons, 19% of shoppers say they would not buy own label ready meals, compared with 8% at Sainsbury and 11% at both Tesco and Asda. North suggests that the perception of quality is not yet being delivered at Morrisons, possibly because it is still digesting Safeway.
There is also some reluctance among customers over the age of 45 to buy own label, with only 63% regarding such products as better value for money than branded, compared with more than 70% for people aged 45 and younger.
Not surprisingly, the research also reveals that AB customers have a more negative perception of own label, with 40% believing them to be worse quality than branded, compared with an average of about 32% for the C1, C2 and DE demographics.
More than a third of the survey's respondents say they will not buy own label alcoholic drinks and 26% will not buy branded health and beauty products. This compares with only 9% that would not buy own label tinned foods.
North believes there are "high brand associations" within these product groups, but on a positive note for the supermarkets, she says: "It provides a greater opportunity for them to explore these areas and to offer such products to those consumers who deem own label to be as good as branded on quality, value and innovation."
Despite these pockets of reluctance to buy own label, Asda's commitment to such products is reflected in its new Essentials format store, which will stock a chunky 95% own label alongside only 100 key branded lines.
Although there will inevitably be challenges, David Stoddart, analyst at Teather & Greenwood, says there is a clear logic in such a concentrated own label offer.
"The operating costs of smaller stores are higher, so Asda is compensating by gaining higher margins from own label."
He adds that because there is a convenience aspect to the stores, this will help the pricing as consumers will be willing to pay more."The price premium is the insurance premium for availability."
However, although small in numbers, the 100 brands will be crucial to the overall offer, according to Darren Shirley, food retail analyst at Shore Capital. "There will always be certain brands that the consumer likes, such as Coca-Cola and Kellogg's. I'm not convinced that entirely own label stores will work."
Stoddart agrees and suggests that brands will continue to play a significant role in UK supermarkets because they not only allow companies to compare price but also provide consumers with choice.
"Although there is further to go with own label, customers don't want to be dictated to, so the days of all the supermarkets having a mono-brand strategy such as M&S's are a long way off. I'll be long retired by then," he says.
That said, Asda's move highlights the huge confidence that it has in own label and its growing acceptance by consumers.
Though few are likely to go as far as 95% own label, Mike Dennis, analyst at Cheuvreux, believes there is further mileage. "Definitely in certain categories they can make further exploitation of margin by positioning their products above the discount brands. By doing this, it positions them as similar quality to the brands but at a cheaper price."
The multiples have another advantage over the discounters. With most own label lines they have retained their own name on the label, unlike some of the discounters.
Robert Clark, director of Retail Knowledge Bank, suggests that the likes of Aldi - with its Specially Selected brand - have been held back by not including their names on their own label products.
"If it's not a straightforward own label they are taking a risk, as they then have to establish these tertiary brands. The reason they've made little headway in the UK is because of these unknown brands," he suggests.
But if the multiples are on the right track when it comes to grocery own label, they still have a long way to go before they can boast the same of non food.
Stoddart believes that own label sales will eventually grow in non food categories, but says that it will take some time because the multiples' heritage is steeped in food and their foray into non food own label is a more recent development.
That said, if the phenomenal success of premium own label grocery is anything to go by, it can surely only be a matter of time.
First-hand views of private label
Jan, 55, Drighlington, Leeds: