Though 55% of U.S. consumers claim that their household financial health is good, nearly half of all shoppers are still looking for deals in order to make ends meet, the latest IRI Consumer Connect survey shows.
The report revealed that when it comes to selecting which retailer to patronize, 95% of all shoppers prioritized low price points, and 82% said a store’s selection of private labels was important.
The sustained strength among store brands—75% of shoppers view them as “just as good” as the national competitors—may be indicative of permanent habits.
“Things are healed,” Susan Viamari, vice president of thought leadership for IRI, said of the economy. “I think the underlying issue is that people haven’t regained their confidence.”
Viamari explained that while less Americans may have their backs against the wall than at the height of the financial crisis, the experiences of the recent downturn instilled habits of frugality that have not been shaken.
This is especially true among Millennials, a group that entered adulthood both in the wake of economic hardship and in the golden age of private label strength.
“If you think about when seniors entered their adult lives and formed their lifelong shopping behavior, private label was a lot different than it was today,” explained Viamari. She said that generic store brands were truly a step down at that time.
“Millennials entered adulthood when private label had taken off,” she added.
Nearly 85% of Millennials feel that store brands are of equal quality as their national competitors while 76% argue that the private labels are a better value.
Their parents, Gen X, tend to agree, with 78% seeing store brands as equal quality and 69% viewing them as a better value.
While Baby Boomers trail in both instances, the discord is not great. Nearly 70% of the oldest age bracket sees private label and major brand names as equals and 64% believe that store brands provide a better bang for the buck.
“I feel that private brands are pretty well entrenched at this point in time,” Viamari said, echoing the report’s findings.
According to the study, spending on non-food store brand items finished ahead of national brands for the second segment of 2017.
Viamari added that even as the economy continues to heal, she does not foresee shoppers straying away from the products that they have grown accustomed to.
Though private labels have made the most of the recession launching pad, Viamari does not recommend that retailers turn their backs on national brands.
“You need to have both,” she said. “As a retailer it’s up to me to understand what kind of a complement of store brands and national brands are going to fit my key shoppers. You want to make sure you have a product that matches the quality that my shoppers want at a price they’re willing to pay.”
Viamari said that each individual category would require a unique formula for each retailer.