Brands still have an edge when it comes to quality perception, but own-label products are catching up – and a quarter would consider trading down in response to rising prices.
Some 64% of consumers believe branded products are better quality than own label, while 59% see them as more consistent and 57% believe they taste better, according to research by The Harris Poll UK.
However, 83% of consumers believe own label has improved significantly, narrowing the gap that brands have historically relied upon to command a higher price.
“Brand equity still exists, but it is no longer sufficient to justify a consistent price premium in everyday purchasing decisions,” said managing director Sarah Beams.
“While quality and taste scores remain relatively strong, only 41% agree branded products offer better value for money, and 34% actively disagree.”
Consumers are most likely to favour brands for confectionery, snacks and desserts, and turn to own label for ambient staples. They were most confident that they could pick out branded items in a blind taste test for treats and indulgent items.
“Consumers are not rejecting brands outright, but they are concluding that own label now meets the same standard at a lower cost,” Beams said. “The shift isn’t that brands got weaker, it’s that own label became ‘good enough’. Consumers haven’t fallen out of love with brands, but they have fallen out of need for them.”
The findings come at a time of rising food inflation, which the FDF predicts could reach 10% by December.
Asked what they would do if a product they bought regularly needed to change due to rising costs, a quarter of consumers said they would switch to a cheaper alternative and 22% that they would wait for promotions before buying the item. Only 24% were willing to pay more outright.
“This creates a hostile environment for brands, where nearly half of consumers are either trading down or delaying purchase rather than absorbing price increases,” Beams added.
Consumers preferred those options to changes to the product itself, such as paying the same amount for a smaller pack size, or for suppliers to use cheaper ingredients to maintain the price point.