“The influence of private label products has never been stronger,” said Mintel. The power reflected the “… fraught economic climate and an ever-expanding range of high-quality own-label ranges offered at food retailers”.
About 57% of consumers believe own-label products have improved in taste and quality, while 52% prefer them to brands in some cases, according to the research.
More than 80% of adults think own-label products provide value for money, compared with just 16% for brands.
About 80% of shoppers buy own-label products, compared with 89% who buy branded goods. But the research revealed that up to 20% of those who buy branded products are set to buy less in the coming year.
Consumer budgets
Chris Wisson, senior food analyst at Mintel, said: “While there are signs that pressure on consumer budgets is slightly easing, 2012 looks set to see the majority of adults remaining watchful and discerning when shopping.
“Our research suggests that, on balance, consumers expect to buy more standard and value own-label foods while cutting back on brands.”
Own-label food and drink sales reached £37bn last year, up by 24% since 2006. Over the same period, the wider market grew by 23%.
The market for own-label is forecast to reach £46bn by 2016 as recession-hit shoppers hunt for cost savings without compromising on quality.
Only 6% of adults who currently buy economy own-label products told researchers they expect to reduce their usage in the coming year. But 18% of current users said they expected to buy more in the year ahead.
Premium own-labels
Premium own-labels have also fared well recently despite budgetary pressures and are bought by 71% of shoppers. About 27% of adults expected to buy more of these products this year while only 12% expected to cut purchases.
“The progress of own-labels is such that over half (52%) of adults prefer the taste of own-label products to branded equivalents in some cases, suggesting that they are increasingly becoming brands in their own right,”said the Mintel researchers.
Meanwhile, Panmure Gordon analysts Graham Jones and Damian McNeela forecast little improvement in tough UK trading conditions.
Commenting on the prospects for Premier Foods today (May 23), they said: “Life for UK food producers remains difficult.
“Costs have remained stubbornly high, consumers are seeing real incomes squeezed and retailers seem unable to kick the promotional habit.”
