Agency: Adam & Eve
By Mark Ursell, brandrepublic.com, Monday, 14 November 2011 08:00AM
Asda’s recent pledge to slash the cost of 3,000 products is the latest salvo in an escalating price war between the country's biggest supermarkets.
The move came after Tesco launched its own £500m price-cutting campaign and Sainsbury's unveiled its Brand Match scheme.
Asda, the UK’s second biggest supermarket, has also seen sales of its own-label brand surge in the year since its launch, as consumers trade out of brands to save money amid the economic gloom.
Speaking at a recent IGD conference, Andy Clarke, chief executive of Asda, said the supermarket’s Chosen By You own-label range now accounts for 40% of its food sales and is the fastest-growing own-label brand in the UK.
Similarly, Mike Coupe, group commercial director of Sainsbury’s, said the grocer’s By Sainsbury products accounted for one third of total sales, or £21bn.
Many of Tesco’s reductions in its £500m campaign focus on its own-brand products.
The latest insight generated by Tpoll’s online consumer panel strongly reflects this trend, and shows that nearly two-thirds (64%) of people have been buying more own-brand items to save money.
Hundreds of forum members, when asked whether they had changed their food shopping habits because of the recession, said they had switched or ‘downgraded’ to own-label or value brands and study prices more carefully because they are shopping on a tighter budget.
There is also a trend for buying in bulk with items on offer and for cutting back on the volume of items purchased - as well as cutting out ‘luxury’ items altogether.
Many said they were "constantly looking for bargains" in the discussion forum supporting the poll.
The discussion forum also found that:
UK grocers are almost unanimous in saying that consumer behaviour has shifted noticeably as rising food and fuel prices, coupled with slow wage growth, have squeezed disposable income.
However, nearly one third of consumers (32%) said they had not changed their shopping habits at all, although many already regularly purchased own-brand products.
"The recession hasn't changed my food shopping habits as I only buy what we need," struck a similar chord to many responses.
Meanwhile, a minority of 3% claimed to have bought less own-brand food.
As we move towards Christmas it will be interesting to see how brands and baskets fare as supermarkets tweak their strategies to try and stay ahead.
Tpoll’s online own-brand survey received 1078 responses over a five day period.
This article was first published on brandrepublic.com