Australians switching to cheaper, private label grocery brands to save on household costs

supermarket shoppingMore than half of all Australians (54 per cent) have changed their spending to save on household expenses over the past year, and 43 per cent said they would switch to cheaper grocery brands, according to The Conference Board Global Consumer Confidence Survey in collaboration with Nielsen.

Nielsen’s syndicated Grocery E-Commerce Report shows that the grocery sector is still experiencing a prolonged period of low growth, while online grocery sales continues to outpace growth across the total market, up by 35.4 per cent.

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Nielsen found that more and more customers are turning to private label products, with growth over four times that of total branded products at a national level, driven by Woolworths, Coles and Aldi’s core range.

“Another emerging area of growth has come from Discounters (Aldi, MyChemist, Costco); this sector has also shown relatively strong sales performance over the past year (up 4.5 per cent). The key to success for retailers appears to be a focus on high quality products at low prices,” Alfredo Costa, executive director, retail – Nielsen, reported.

Aldi is a prime example, having had its most successful Christmas to date in 2018.

“Across a number of categories, private label falls into the top five manufacturers. The value for money continuum—from premium through to budget private label – is being stretched, and this has strategic implications for brands as shoppers become more and more comfortable with private label,” Costa said.

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Within grocery, consumers are most willing to buy premium items include meat/seafood; coffee/tea, alcohol/spirits, dairy products and haircare, highlighting a demand for premium grocery items that save on out-of-home expenses such as dining out or salon trips.

Sustainability is getting higher on the agenda for Aussie consumers, with Nielsen’s Changing Consumer Prosperity revealing that the majority of consumers are either highly or somewhat willing to pay more for products that are environmentally friendly or sustainable (62 per cent. The same goes for products that contain organic or all-natural ingredients (59 per cent), or carry social responsibility claims (55 per cent).

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