Shop Brands Now Preferred By Majority Of Aussie Shoppers

Customer research company Canstar Blue has released a new survey of Australian shoppers that shows we’re lovers of shop labels.

In fact, the majority of Australian shoppers will choose private label groceries over larger name brand items, with just under two-thirds (or 65%) indicating they preferred them. This is a pretty impressive increase from a similar study conducted six months earlier, that indicated on 44% of shoppers preferred the shop brand.

These increases follow a trend that has seen shoppers thinking about private labels in a more positive way in terms of quality. Around three quarters (or 76%) of the shoppers surveyed were happy to say that they considered the store brands from Coles, Woolworths and Aldi as being of ‘good quality’. This is also an increase from 59% six months ago.

Enough with the figures and let’s know what’s the real deal with these shop brands now preferred by majority of Aussie shoppers.

Better Quality, Better Price

Canstar Blue spokesperson Megan Doyle said there would need to be a very strong preference for a particular name brand to outweigh the perceived value offered by store brands.

“You need to be convinced that a big name brand is superior in quality to spend the extra money. With private label products improving, the difference in quality seems to be narrowing and consumers are simply following the cheaper prices,” she said.

In the past store brands were widely considered to be the cheaper and lower quality alternatives, but as stores put more effort into their private label offerings to increase their quality, those perceptions are changing. This is especially true of Woolworths and Coles as they work tirelessly to slow the move of customers to Aldi as they look for cheaper alternatives in their private labels.

“The challenge for the big two is convincing consumers that they can do a cheap, big shop at their stores “” that means convincing them about the quality of their home brands. A large increase in the number of shoppers favouring private labels suggests their efforts are paying off,” Doyle said.

Catching Up With The World

At the moment in Australia, according to IBISWorld a market research firm, around 30% of all food and grocery sales come from private-lable products. By 2020-21 this number is estimated to reach 35%, but it remains lower than other countries.

Brooke Tonkin from IBISWorld noted that Australia’s numbers “compares with over 53 per cent in Europe and 35 per cent in the United States, indicating that there is room for expansion in Australia”.

Most Brands Don’t Matter

Ruslan Kogan, the man who built his entire business model on the value of cheaper, private label electronics said it was pretty easy to tell what brands people placed value in by looking at shops like Aldi where private labels are the norm: “You’ll see Nutella. You’ll see Coca-Cola. You’ll see Milo. A handful of brands,” he said.

However, he brought attention to the fact that for many staples, Australians aren’t looking at the brand at all, but the price. Supermarkets have caught onto this shift in thinking, and altered their offerings accordingly.

Within the Canstar Blue survey customers were asked to rate their favourite brands in eight ‘staple’ categories. Of those categories, store brands took the lead in five places, with massive brands Devondale, Nuttelex and Burgen taking the remaining three. However, even when private label brands didn’t make the top spot, they still ranked very highly, with Aldi product being the most highly rated overall.

What It Means For Brands

Ultimately these changing attitudes mean that for some brands, the fight is on to keep connecting with consumers in a valued way.

“The supermarket focus on private labels means cheaper groceries for consumers, but it could also mean that only the most popular brand names will survive on supermarket shelves in the long-run. Some brand names are facing a fight to survive,” Megan Doyle noted.

It’s a harsh reality, but not really a surprising one as the cost of living becomes more expensive, and families, singles and couples look to cut costs wherever they can.