The credit crunch has sparked a migration to own label. The categories where shoppers are most likely to have switched to own label are frozen food (30%), bakery (27%) and soft drinks (21%). Alcoholic drinks and personal grooming are among the least. This suggested brands with strong emotional or sensorial responses were outperforming commodity-style ones, said brand consultant Don Williams. “Consumers will spend more on the little things they feel are special,” he said.
“We have done a lot of work on looking at our Basics range against what discounters offer and we beat them hands down in terms of price,” said Sainsbury’s chief executive Justin King.
A spokesman for Asda said the company had recently cut the price of every Smart Price food product. “By lowering the price entry point to fresh food, value-conscious shoppers can slash their weekly shopping bill by more than 50%,” he said. “We will also be cutting the price of well-known branded and own-label food and grocery items households have to buy week in week out: in all more than 5,000 products."
The categories customers were most likely to cut back in were alcoholic drinks, confectionery and meat. The cutbacks in meat were reflected in falling volume sales at the big four retailers of between 5% and 7%, according to a report by AHDB Meat Services.
“It is clear the rising retail price of beef is influencing consumer buying habits,” said AHDB MS senior market analyst Sue Fisher. “Beef mince was the only beef cut to increase in popularity.”
There was more bad news for c-stores, with 27% of those surveyed saying they visited them less frequently. And 19% said they were making fewer trips to supermarkets. Their loss was the discounters’ gain, as 29% said they were visiting such stores more often.
“Retailers shouldn’t be alarmed by these figures,” said Association of Convenience Stores public affairs director Shane Brennan. “In response to challenging economic times, consumers change how they think about their shopping. Convenience stores should focus on what they do best, and if they do that well, they will be fine.”