CHICAGO – Economic indicators have been shaken by severe fall weather, but the economy still appears to be healthy and strengthening. However, 31% of U.S. households are struggling to afford groceries in the third quarter of 2017, in line with the same period in 2016 but up from 28% in first quarter 2016, according to IRI Consumer Connect survey results released this week. Consumers are continuing to rely on private label products to help make ends meet, but the role of private label in packaged goods goes way beyond money saving.
Results from the IRI survey also revealed that younger and less-wealthy shoppers are struggling more than others. A full 59% of consumers from households earning under $35,000 per year and 36% of millennials are having difficulty affording groceries. As a result, 89% of these lower-earning shoppers and 90% of millennials are buying private label brands to save money. And 81% and 83%, respectively, will try lower-priced brands to save money compared with 73% of all consumers.
“It is no secret that consumers are interested in CPG products that address their wants and needs,” said Susan Viamari, vice president of thought leadership for IRI. “When you look at the uncertainty and financial hardships that many consumers are facing and couple it with their favorable attitudes about the value and quality of private label products, it all adds up to a positive outlook for private label success. In fact, value is playing a huge role in the ‘want equation,’ and consumers will buy different brands, including private label solutions, to get the value that they want.”
Seven out of 10 millennials prefer stores that have a wide selection of private label products, and nearly as many (66%) often buy private label options over name brands. The appeal isn’t limited to younger shoppers; consumers from all generations view private label as a way to save money and improve value without sacrificing quality.