Slow own brand sales maybe due to quality 'downgrading' says Ogilvy planning partner Katrina Michel
A slow growth in own-brand product sales may reflect the ‘downgrading’ of quality which consumers have begun to notice, Katrina Michel, planning partner for Ogilvy, has said.
In response to market research that found that while total grocery sales have risen by 3.8% in the last three months, although sales of budget own-brand products have only grown by 2% in contrast.
“People on limited budgets often buy expensive branded goods in preference to own label because even though they cost more they are certain that the household will consume the entire amount and they don't want to run the risk of having to throw half of it away,” explained Michel.
“Brands that are often cited are Heinz Beans and McVities Chocolate Homewheat where one of these biscuits is nicer and more satisfying than two of a less tasty own label.
“It looks as if own label have been downgrading their spec in the recession and consumers have begun to notice, making the decision to trade back up. I am sure you know that Moneysavingexpert.com has an own label forum where consumers can rate the quality of own label brands and people are very quick to praise and condemn putting valuable information into the hands of many. No-one likes to feel they have made a false economy.”
Michel added that she thought that the theory was more true within the food sector, as a result of the taste and look of those products.
“Finally what we must also factor is the amount of promotions - if you are prepared to visit a number of supermarkets in a two week period you can usually get the brand you want on promo if you look long enough. I don't think it is because people have more money to spend, just that their criteria for what they spend on are different.”