Scouring the web for the lowest prices, portfolio shopping across stores for that week’s best deals and no longer automatically loyal to either brands or retailers the new breed of savvy shoppers demand the same, or better, quality for less.
Mums have become even better procurement directors for their households. Throughout 2011, the Asda Income Tracker has found families with less to spend and we’re seeing the true cost of living take its toll. Inflation is rising at twice the rate of earnings, petrol prices are peaking and utility bills are getting steeper; last month we revealed a £14 a week hole in people’s pockets.
We know this will be a tough Christmas for many people. The weekly grocery budget has to stretch further than ever before. Seeking value has become not just a necessity, but the smart thing to do.
Whether you refer to them as own-label, own-brand, private-label or as my colleagues would say Asda brand, these products symbolise that mindset and the seismic, irreversible shift in the way shoppers now think and behave. A recent Which? report found 41% of Brits buy more own-label ranges than a year ago, while Datamonitor claims more than two-thirds believe own-label foods are as good as, if not better than, leading brands.
Customers trust us to deliver the best prices in tough economic times last year we proved we could do that and still deliver the very highest quality. The £100m investment in Chosen by you a reformulation of our mid-tier range that spans over 7,500 products delivered a major wake-up call for the industry.
To date, we have involved more than 70,000 UK customers from all supermarkets in blind tests with Cambridge Market Research in 70 different locations. Twelve months on, Chosen by you is the fastest-growing core own label in Britain and accounts for 35% of all own-label sales. It defines the new face of own label, which is value with quality guaranteed by consumers.
We entered own label in the 60s with Queens Coffee. M&S followed in 1972, Tesco founded Finest in the late 1990s and Waitrose launched Essential in 2009. The launch of Chosen by you marked a new era in own-label history and kickstarted a re-evaluation of those products across the industry, with others reformulating, rebranding or re-launching their mid-tier ranges.
It remains a game-changer for Asda and an instrumental part of our future with Asda brands accounting for about half our total sales, mid-tier represents the bulk of that (worth £8bn to £9bn a year).
People want choice and there will always be a market for long-established brands, but I believe that if retailers cannot offer the new breed of shoppers an own-label option that is at least of comparable quality they are failing their customers and will lose particularly this Christmas, when there could be an unprecedented squeeze on wallets.
Own label has come a long way. It seems almost absurd now that it was once considered the ‘poor relation’ of branded goods. Today, it represents £52bn annually and the share of own-label sales in the UK is the highest in Western Europe.
But it is not simply an obvious choice during a recession customers know now that value and quality can co-exist, and there is no going back. It will certainly be crucial to the success of this golden quarter.