BrazilMany consumers turn to private label products amidst rising grocery prices
A survey from Simon-Kucher of 8,000 consumers across seven major markets indicates a growing preference for private label products, driven by heightened price sensitivity and evolving consumer priorities.
The report shows that shoppers worldwide are reassessing their purchasing decisions, placing a greater emphasis on affordability while also seeking improved quality and, in some cases, sustainability. This shows that inflation and other global economic pressures are continue to squeeze consumer wallets.
Private label products are the sort of ‘store brand’ products that are manufactured by one company, but marketed and sold by another company. One common example is the store brand products sold by supermarkets under their own branding. The appeal of private label products is that they are sold at a lower price when compared with brand-name products.
More than half (53%) of consumers prefer private labels, with Spain buying these products the most. Between 55 and 66% of respondents across all countries state that price has become even more important, particularly in the UK, the US, and Spain.
And despite most of the respondents opting for the more affordable options, 34% of respondents placed an emphasis on the quality of products. Around a quarter of consumers in countries like France and the Netherlands also stressed the importance of sustainability.
“The enduring appeal of private labels underscores the changing dynamics of consumer behavior,” said Alexander Bilsing, partner at Simon-Kucher. “Price sensitivity remains the top factor for shoppers, but quality and sustainability are becoming increasingly important. Retailers that recognize and act on this shift will be better positioned to capture and retain customer loyalty.”
When asked how they would react if prices rise (a likely scenario in the current global political climate of tit-for-tat tariffs and general uncertainty), more than half of consumers said they would be even more likely to opt for private labels, especially in European countries.
“The days of private labels being viewed solely as budget options are over,” added Martin Crépy, senior partner at Simon-Kucher. “These private labels now represent a sophisticated strategy to meet the modern shopper’s expectations for both affordability and product quality.”
The broader economic landscape significantly influences these consumer trends. Persistent inflation, driven by factors like supply chain disruptions, rising energy costs, and geopolitical instability, has forced consumers to tighten their budgets. This has led to more price sensitivity, making value-driven options like private label products more attractive.
