Private brands remain strong

M&S wines have won awards

The head of the UK grocery chain Morrisons observes: 'If people are feeling the pinch, they tend to shift out of brands to own [private] brands'. That's why, during the recent recession, private brands marketed by grocery retailers did so very well.

Traditionally, consumers switched to private brands to save money, and then switched back to manufacturers' brands once they felt less anxiety over economic circumstances.

Consumer behaviour these days indicates that despite economic recovery and consumers feeling more confident about spending, private brands continue to sell well. Private brands are helping Lidl--the deep-discount grocery chain--gain market share against traditional UK supermarkets like Tesco, just as they are helping Aldi. 

In fact, customers who can afford to buy manufacturers' brands often choose to buy private brands because they want both value and quality. At Marks & Spencer, for example, the store's brand of wine has won numerous awards, reassuring buyers that the quality is good, not just the price. The newest trend is toward premium private brands, reflecting the dual interest in value and quality.

This post updates the private brand discussion in Chapter 6 of Essential Guide to Marketing Planning 4e.