The Inflation Diet: Private-labels may permanently replace big-name brands; 73% of Americans will keep buying even if inflation eases
Attest, a leading consumer research platform finds that a wide majority - 7 in 10 (73%) - of consumers have acquired a taste for private-label brands and have no intention of reverting to more household (and expensive) names.
- 41% of shoppers admit to visiting multiple supermarkets in person to hunt for the best price
Inflation’s transformative impact on long-held shopping habits amongst Americans is becoming clearer according to a new research report released today.
Attest, a leading consumer research platform finds that a wide majority - 7 in 10 (73%) - of consumers have acquired a taste for private-label brands and have no intention of reverting to more household (and expensive) names.
Its 2023 US food & beverage trends report surveyed 2,000 nationally representative US consumers revealing:
- Consumers turn away from big-name brands: The research finds that supermarkets’ private-label brands have benefited from the rising cost of living, with shoppers turning away from more expensive household names. More than 58% of Americans say they are “very likely” to purchase these cheaper alternatives, with a further 27% “somewhat likely”. Less than 4% are now “unlikely” to buy private-label brands.
- Many parts of the shift to own-label are potentially permanent: Digging deeper into the 73% who intend to stick with private-label products, 34% say they will “definitely” carry on buying them, while 39% will “probably” keep them in their shopping baskets. Only 9% say they wouldn’t stick with these less well-known brands.
Price is now the be-all and end-all for American shoppers
In the age of inflation and an uneven economic outlook, the research also finds that a majority of consumers are solely concerned about value when shopping for groceries.
- Nearly all consumers are bargain hunting, visiting different supermarkets: 89% of Americans admit to bargain hunting when grocery shopping at the moment. So much so that four in ten (41%) reveal they are visiting multiple, different supermarkets in person to find the best deal, by contrast, 33% check a variety of stores online instead.
- Forget the hi-tech shopping experiences: When asked to select what incentivizes them the most to shop at one particular supermarket, lowering prices ranked as the most important factor. Cheaper pricing is 4x more effective than special offers and promotions (ranked second). Meanwhile, fancy in-store technology is ranked as the factor least likely to motivate consumers.
- Americans aren’t afraid to quit specific retailers entirely, due to high prices: In a qualitative question, some shoppers even admit that inflation has caused them to give up shopping at specific supermarkets because of high prices or lack of deals. Most likely to be named were Walmart, Publix and Whole Foods.
- Consumers want discounts (and more discounts): Out of six promotion types, discounting the price of a product is what shoppers want the most, closely followed by ‘buy one get one free’ deals. Giving extra loyalty points is deemed the least attractive offer.
- And most will buy a product discounted by 20%: The research also details that discounts don’t need to be huge to incentivize shoppers. When asked for the minimum discount that is persuasive, the top answer was a 20% discount (for 29% of people). A further 21% would buy with a 30% discount, while 19% would be convinced by a discount of 10% or less.
The data also highlights that consumers still believe it’s better to go to a store when searching for the best deals on groceries. Nearly 55% of Americans think in-store shopping is best for bargain hunting, while only 18% favor online.
Brands also often cut their marketing budget when times are tough, but scrimping on advertising could be a false economy. According to the research, 58% of consumers who say they shop around for food and beverage deals rely on adverts to stay informed. Promotional emails and mailings are also effective for reaching bargain hunters (at 40%).
Jeremy King, CEO and Founder of Attest, said of the research: “American shoppers have changed in behavior and have acquired a real taste for private-label brands due to inflation’s impact on the cost of grocery and household products. This poses a significant challenge to well-known brands that can’t compete on price and who may end up the losers here as these shifts in shopping habits may be permanent for several important sub-segments.”
“The big-name brands need to give consumers new, compelling reasons not to switch to their private-label counterpart, or in some cases motivate shoppers to come back to big brands.”
“The Attest research also finds that this move away from brand loyalty isn’t just affecting the products that Americans put in their shopping baskets. A sizable number of consumers - 41% - are choosing to make trips to multiple supermarkets in person to hunt for the best price. This fragmentation of shopping in pursuit of value, and at the expense of shoppers’ own time, is another new and emerging behavior. This puts grocery chains under serious pressure to either offer the best deals that beat other retailers and attract consumers, or to extend their own-label product lines to offer ever-increasing appeal to inflation-weary consumers.”