Supermarket Spending Drops, But Private Labels Gain

High pump prices and a struggling economy keep families focused on trimming budgets and leaving brand names behind.

June 14, 2011

JACKSONVILLE, Fla. - Grocery shoppers are continuing their penny-pinching ways acquired at the start of the Great Recession, and the only good news has been the growth of private labels, Advertising Age reports. A new report finds that only 23 percent of consumers say they will shell out more this year over last year on groceries, while 13 percent have reduced spending and 63 percent will keep costs the same, according to Acosta Sales & Marketing.

"While the recession might be over, the recovery hasn't really begun," said Ramin Eivaz, chief marketing officer for Acosta. "Shoppers are very, very careful and watchful and they are not shifting their smart, value-seeking behavior because the uncertainty is still quite high."

"The Why Behind the Buy" survey found that shoppers have lowered their monthly grocery bill on average to $279 from $298 from the same time in 2010. That decline speaks to consumers being serious about saving money, considering that prices at the supermarket have risen during that same time.

Store brands have been the big winner, with more than half of the respondents (54 percent) saying they purchase "a lot" of private label products to save cash. Forty-one percent indicated they bought store brands for around half of their purchases. Nielsen found that private-label sales account for 17.6 percent of all store purchases, up from 16.9 percent in 2009.

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