Customers are turning to supermarket own-brand products in a bid to save money, with Kantar reporting sales up 13.2%, well ahead of the 4.6% rise in branded products.
But supermarkets are profiting from the switch by raising own-label prices faster than branded products. Data group Circana reveals that own-label prices were up 16.3% vs 10% for brands in the 12 weeks to May.
At the same time, many supermarkets have also been expanding their own-label ranges.
In 2005 about 45% of grocery sales were own-brand, but by the end of 2022 it had risen to 51%, according to Kantar. The move to own-label is a trend that Kantar says “shows little sign of stopping,” particularly in the food, laundry and hygiene categories.
Another shift has been the rise of loyalty schemes, which have become the first port of call for customers in search of a bargain. Supermarkets have ramped up their schemes and reduced in-store deals which now account for 25% of all spending compared to 40% in 2014.
But even loyalty schemes can raise issues. Consumer magazine Which? has reported Tesco to the regulator (they don’t say which one) for not including unit pricing (the price per 100g or 100ml) in its Clubcard offers. Which? believes this could be misleading customers, under the Consumer Protection from Unfair Trading Regulations 2008.
Discounters like Aldi and Lidl, which offer lower prices and decent products, are doing better at maintaining their reputation. Kantar says their sales have grown by more than 23% year-on-year in the 12 weeks to 14 May – more than twice as fast as sales at Tesco and Sainsbury’s.
Last year Aldi overtook Morrisons to become the UK’s fourth biggest supermarket (behind Tesco, Sainsbury’s, Asda), and Lidl is now challenging for fifth place.
The top three supermarkets are not covering themselves in glory, yet brands are still losing ground to own-label. Straightforward fair pricing shouldn’t be that hard.
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