THE SUPPLY of own-brand products on supermarket shelves will increase dramatically over the next four years as retailers use them as a bargaining chip to get bigger discounts from suppliers, a retailing conference in Dublin was told yesterday.
The Checkoutconference also heard most Irish shoppers were seeking a balance of "value" and "values" from their weekly shop; while prices remain the most important factor influencing purchases, quality is a close second.
Although the recession has given a boost to own-brand products, Rabobank’s Sebastian Schreijen told the conference, their proliferation has not been driven by consumer demand but because retailers believe they are effective in forcing suppliers to offer more favourable terms or risk losing shelf space.
He said the amount of own-brand products would increase by almost 50 per cent in Ireland to more than 40 per cent by 2015.
“Brand leaders will have an important role to play and I expect them to hold on to their market share and the real pressure will come on the secondary brands,” he said. The only way many would survive would be to find niche markets or increase volume.
The conference also heard that despite the bleak economic outlook, Irish shoppers have not abandoned their ethical values when it comes to grocery shopping.
International food and grocery analysts IGD carried out a survey of more than 1,000 shoppers in January and 41 per cent said the range of ethical products on offer was “very important” when choosing a grocery store, compared to 24 per cent of British shoppers.
A further 57 per cent said a grocery retailer’s corporate responsibility record was “very important” – just 27 per cent of British respondents agreed.
Almost two-thirds of Irish shoppers claimed the “quality” or “performance” of products was very important when choosing what to buy, the second most important factor after price, which 68 per cent ranked as the most important element.
Chief executive of IGD Joanne Denney-Finch said shoppers were taking more care over their choices and every company was being ranked and rated for its ethical standards. “The truth of the matter is that during a recession, retailers who concentrate on quality do better.”
She said the study showed people were shopping around for better value without compromising on quality.
Senior retail analyst with Nielsen Europe Jean Jaques Vandenheede said consumers were passive and resistant to change but Irish shoppers bucked the trends between 2005 and 2009.
This was when the number switching supermarkets based on promotions jumped from 5 per cent to 19 per cent, which was “the biggest such shift I have seen”.
