The growth in sales of retailers’ own-brand products is likely to slow although the shift in loyalty away from branded lines is permanent, according to retail consultancy Verdict Research.
Since the fourth quarter of 2008, cash-strapped consumers have migrated to private-label products “on an unprecedented scale” as the recession hit. Retailers such as Tesco, Carrefour and Metro have exploited this opportunity by launching new private label lines positioned at the value end.
But Verdict predicts that, after the recession, the growth in own-brand lines will slow, although consumers will be drawn specifically to higher end private label ranges, such as organics or fair-trade products.
Simon Chinn, co-author of the report, said: “As consumer confidence is slowly returning in some markets, consumer purchasing behaviour will become more polarized, with premium private labels gaining more traction again.”
It found that, at the value end, ranges will “lose momentum and shelf space, as the novelty factor wears off, although they will not disappear altogether”.
Verdict said that it is not just food retailers capitalising on the flight to own-brand, but also DIY and electricals retailers, with the trend towards energy efficiency bringing a “a massive opportunity to boost own-label profiles”.