Rising cost of living drives strong demand for private label

Amcor has unveiled new research shows that private label products have become a firm staple in consumers’ homes.

Seventy per cent of European consumers regularly buy private label products when grocery shopping. While 50% of consumers who actively purchase private labels due to pricing will continue to do so, based on their satisfaction with the high quality of the products.

The research – based on responses from over 3,000 grocery shoppers in the UK, France, Germany, Italy, Poland and Netherlands – looked into how European consumers perceive, consider and purchase private label products.

In the study, 85% of respondents ranked “Price” as the top reason for purchasing a private label item, while 48% stated “Promotions” are one of the main drivers to buy more private label products.

The quality of private label products was also recognised as a key factor when making buying decisions. When defining quality, consumers’ top three factors were: “Better taste”, “Local production” and “Cleaner ingredients”.

“While the research confirms that the price of private-label items impacts grocery shoppers’ purchasing decisions in the current economic climate, quality is still a crucial factor influencing consumers’ buying journey,” explained Madalina Mitru, strategic marketing & value chain manager at Amcor. “Taste, quality, and origin are all still important when consumers are making purchasing decisions. Furthermore, over half of European consumers (51%) said they perceive no difference in the quality of private-label products versus branded ones, putting private-label brands in a strong position for the future.”

The research also uncovered changes in consumer attitudes towards retailers and brands, in particular how they demonstrate a commitment to sustainability.

Forty-two per cent (42%) of European consumers think that local production is an area where retailers have been making an effort when it comes to sustainability. One-third of consumers (34%) also believe they have seen progress in “Food waste reduction”, “Less excessive packaging”, and “More sustainable packaging”.

Despite retailers making progress when it comes to sustainability for private labels, one-third of grocery shoppers (35%) believe more efforts are needed to use less excessive packaging and to incorporate more sustainable packaging (33%).

When it comes to packaging: “Recyclable packaging”, “Less plastic”, “Less packaging” and “Paper packaging” were found to be the top claims retailers could make to positively influence a purchase decision for private label products.

Additionally, 28% of grocery shoppers also stated that more sustainable packaging influenced their decision to buy more private label products. As such, more sustainable packaging is one of the top three concerns for consumers and one of the key influence levers available to retailers. This is compared to 48% stating that “Promotions” and 40% saying “Cleaner ingredients” influenced their decision.

Mitru added: “We see a growing shift towards eco-conscious grocery shopping for both private-label and branded products. Consumers increasingly expect their preferred products to demonstrate how they are improving sustainability. Retailers and brands can adopt more sustainable packaging to help retain customers and demonstrate their continued commitment to driving circularity and reducing their carbon footprint.”

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