Study finds consumers still turning to private label, despite growing economy
Private label products are quite popular with younger consumers, who tend to be driven more by product benefits than by brand name.
Despite the U.S. economy growing at a 3.5% annual growth rate in the third quarter, 49% of consumers are making sacrifices to make ends meet, according to survey results released by IRI, Chicago. In fact, the “IRI Private Label 2018” report reveals that eight in 10 Americans buy private label products frequently or occasionally in order to save money.
Private label products are quite popular with younger consumers, who tend to be driven more by product benefits than by brand name. For instance, 92% of Millennials are turning to private label products to save money, compared to 86% of Generation Xers, 81% of baby boomers and 77% of seniors.
“The increased likelihood of younger consumers turning to private labels really bodes well for the retail brand sector of the industry,” says Susan Viamari, vice president of thought leadership. “It’s truly a testament to the success private label innovators have had in bringing to market the solutions that fulfill high-demand shoppers’ needs and wants.”
The struggle is real for Millennials
The latest IRI Consumer Connect Index further highlights Millennials’ financial stress. The Index, which monitors consumers’ financial health and CPG behaviors for factors such as brand loyalty, attitudes toward organic/natural foods and beverages, perception of national compared to store brands and frequency of using retailers’ and manufacturers’ coupons, came in at 97.6 for Q3 2018 for all consumers. This is up slightly compared to Q3 2017 (96.8). However, the current index for Millennials is at 94.5 compared to 94.7 in Q3 2017. With a benchmark score of 100, a Consumer Connect Index score of more than 100 reflects consumers who are less price-driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes.
In addition, it is still hard for many to buy groceries, with 33% of all consumers having difficulties, compared to 38% of Millennials, 42% of Gen Xers, 34% of baby boomers and 19% of seniors.