Stores revel in lure of own-label

UK grocers have become the envy of the world through their success in weaning consumers off big-name brands and getting them to buy retailers’ own-labels.

The development of own-label started with value packs, moved on to better quality products and more recently has blossomed into new product development, with retailers’ “sub-brands”, such as Sainsbury’s washing detergent, Novon.

But how far have the grocery multiples come in matching the quality and performance of the leading manufacturers? Are they actually up there with the best of them?

In 1994 and 1995, Taylor Nelson AGB Consumer conducted national studies on the perception of brands and own-labels using its Omnimas Omnibus service. This covers a random sample of 2,100 face-to-face interviews each week.

It asks male and female adults, who buy groceries for their household, to compare leading manufacturer brands with the own-label brands at the supermarket where they do most of their shopping.

Comparisons are made looking at 12 particular product categories, and the study examines, for example, how own-label biscuits compare with leading manufacturer brands. It looks at how the products of 17 manufacturers compare with own brands.

The results of the survey show the improving performance of own-labels in six out of 12 product areas, compared with three areas where leading manufacturers have improved their standing. Only chilled desserts show substantial improvement over the period.

The results for the leading manufacturers show seven of them making progress over the period against seven moving backwards. Particularly large, positive changes were found for Mars (up six per cent) and KP (up five per cent). Negative changes have hit Pepsi (down five per cent) and Ross Youngs (down seven per cent).

Also, when we compare performance by sector and the key brand companies, shoppers are rating some individual companies far higher than their product sectors.

If we compare ratings for the biscuit sector and McVitie’s there is a huge gap. This suggests to us that own-label biscuits are firmly established and they are a real option for most shoppers, although there is still a gulf between their products and McVitie’s.

It is also interesting to look at the results by named supermarkets and look at sectors by store.

At Sainsbury’s, the preference for manufacturers’ brand washing powders was down seven per cent in 1995 compared with 1994. At Tesco, the preference for manufacturers’ brand washing powders was down ten per cent in 1995 compared with the previous year. The preference for branded shampoo and conditioner was down 13 per cent over the same period.

The results of the survey indicate how far own-labels brands have come over recent years. In half the product sectors covered, a majority felt that the own-labels at their supermarket were at least as good as leading manufacturer brands.