New research suggests that many consumers are buying private label because they feel as though they "have to" rather than "want to" buy store brands.
According to The NPD Group, private label as a percentage of U.S. household purchases has grown from 18 percent in 2000 to 27 percent at the end of last year. In recent years, however, satisfaction with those purchases has dipped somewhat and the research firm's findings suggest that consumers may move back to brands when their personal finances allow. In 2009, 34 percent of adults said they planned to buy more private label foods than the previous year. Today, fewer than 25 percent answer the same way.
The categories where private label remains strongest are commodities and products used as ingredients. Flour and butter are the two biggest categories fitting this description.
"The question is if food inflation declines and at the same time the economy improves, will consumers return to the name brands they know and trust," said Darren Seifer, NPD food and beverage industry analyst, in a press release. "This could become a reality if retailers don't respond to declining satisfaction and if name brand manufacturers continue to aggressively build loyalty. On the flip side, name brands need to be aware that private label usage continues to increase and the quality perception is improving."