America's Household Brands Losing Ground

Most consumers stick to store brands, but loyalty remains for name-brand beer, soft drinks and coffee.

May 06, 2014

NEW YORK – Consumers are pushing their shopping carts past many of America's national brands and feel little regret in doing so, according to Deloitte's “American Pantry Study” of more than 375 brands across 30 product categories.

Seven in 10 shoppers (71%) say they're spending less on food, beverage and household goods, but don't feel like they're sacrificing much.  In fact, only 31% of brands are considered a "must have" — one that shoppers would buy whether on sale or not  — consistent with the last four years that Deloitte has conducted the survey.

"While consumers initially resented buying less-expensive products out of necessity a few years ago, they have changed their tune,” said Pat Conroy, vice chairman, Deloitte LLP and U.S. Consumer Products leader. “They have shifted from a feeling of settling for lower-priced brands to settling in to store brands distinguished by high quality."

Nearly 9 in 10 (88%) respondents say they have found several store brands that are just as good as national brands and that allow them to feel as though they are saving money without giving up anything.

Across 28 of the 30 CPG (consumer packaged goods) categories studied, Deloitte found that most consumers perceive store brand quality to be the same or better in most of them. Consumers find the highest private label quality in categories such as bottled water, tabletop disposable paper products, food storage, deli meats, condiments and salty snacks. However, year after year, the study shows certain categories where consumers remain committed to their national brands and less likely to switch, even despite price increases, including beer, pet foods, soft drinks and coffee.

Deloitte's study found a narrow set of brands winning the loyalty game primarily on trust, but also on price and product positioning. Trust also trumps other brand qualities when convincing a consumer to pay a little more, though health and convenience also earn points with consumers. Nearly eight in 10 (78%) consumers indicate they have purchased a higher-priced newly-launched product in the past year. Among them, 54% selected a more expensive product because it was a brand they trust, followed by healthier option (38%) and a company they trust (30%). Nearly three in 10 (28%) skipped a lower-cost alternative for one that was easy to prepare or use.

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