Sales of budget own-label products were up 33% for the 12 weeks to 27 December, as shoppers tried to slash their food bills with cheap groceries, new research from analyst Nielsen reveals.
The dramatic increase in budget own-label lines is in contrast to growth of just 5% for standard own-label lines, although budget sales still make up only 2.4% of total sales.
Sales of branded products grew 9% year-on-year on the back of heavy promotions by manufacturers, said Mike Watkins, senior manager of retailer services at Nielsen. “Sales of branded goods are being heavily supported by in-store promotions,” he said. “In November we saw 40% of branded goods being bought on promotion and in December 36%. By comparison, only 20% of own-label goods are sold on offer – this has not changed for some years.”
While supermarkets were investing strongly in their own-label lines in terms of above-the-line advertising, manufacturers of branded goods were fighting back with tactics such as price cuts and multibuy offers, he said. “Shoppers are opting for the best deal – and at present that is translating into increased purchasing of budget own-label lines and heavily discounted branded lines.”
Meanwhile, Marks & Spencer has made an impressive start to the year, according to Nielsen. The retailer posted 6% sales growth in food for the four weeks to 24 January, following a year of gradually declining food sales.
“A lot of it is down to the clothing clearance sale held just after Christmas, which drove footfall through the stores,” said an M&S source. “It was a long break this Christmas, which encouraged shoppers into stores. A fair bit of inflation is still coming through. The strategy has been promotional recently and this seems to be paying off.”
Of the big four retailers, Asda had the best January with sales growth of 10% in the four weeks to 24 January, ahead of its 12-week growth of 7.2%. Sales of electricals, homeware and clothing all helped.
The dramatic increase in budget own-label lines is in contrast to growth of just 5% for standard own-label lines, although budget sales still make up only 2.4% of total sales.
Sales of branded products grew 9% year-on-year on the back of heavy promotions by manufacturers, said Mike Watkins, senior manager of retailer services at Nielsen. “Sales of branded goods are being heavily supported by in-store promotions,” he said. “In November we saw 40% of branded goods being bought on promotion and in December 36%. By comparison, only 20% of own-label goods are sold on offer – this has not changed for some years.”
While supermarkets were investing strongly in their own-label lines in terms of above-the-line advertising, manufacturers of branded goods were fighting back with tactics such as price cuts and multibuy offers, he said. “Shoppers are opting for the best deal – and at present that is translating into increased purchasing of budget own-label lines and heavily discounted branded lines.”
Meanwhile, Marks & Spencer has made an impressive start to the year, according to Nielsen. The retailer posted 6% sales growth in food for the four weeks to 24 January, following a year of gradually declining food sales.
“A lot of it is down to the clothing clearance sale held just after Christmas, which drove footfall through the stores,” said an M&S source. “It was a long break this Christmas, which encouraged shoppers into stores. A fair bit of inflation is still coming through. The strategy has been promotional recently and this seems to be paying off.”
Of the big four retailers, Asda had the best January with sales growth of 10% in the four weeks to 24 January, ahead of its 12-week growth of 7.2%. Sales of electricals, homeware and clothing all helped.
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