EY: Private label products are in an explosive position

By: Trademagazin Date: 2024. 08. 09. 12:30

Persistent inflation burdens the budgets of households all over the world, which also affects their purchasing habits. In addition to relaxation at home, so-called private label products are becoming more and more popular, according to EY’s recent international research conducted by interviewing more than 23,000 consumers in 30 countries.

Almost everyone (85%) is worried about their finances, and the vast majority of customers (72%) have become more price sensitive, especially for food and other essential goods. Many respondents also spend less on food, fashion, beauty and consumer electronics. In the current situation, two-thirds of the respondents are also thinking about how to indulge in their favorite pastimes. Accordingly, more and more people are planning to hang out at home and receive guests, as well as cook for themselves more often, which is a significant change compared to last year’s data.

Is it time for the further strengthening of private label products?

As a result of rising costs, nearly a third of consumers now prefer own-brand products, and according to the majority of them, these meet their needs just as well. Moreover, more than a third of them do not even plan to return to the previously preferred premium products.

“Retailers are trying to take advantage of the situation and use well-targeted promotions to further stimulate the growing demand for private label products. Distributors of premium products are facing a critical period. Much deeper knowledge of customer needs and immediate monitoring of their changes will be necessary in order to better optimize the offer, target special customer segments, enter a certain category. In such cases, a completely reconsidered marketing strategy may be necessary in order to keep their customers satisfied and attract new loyal customers”

– pointed out László Palincsár, head of EY’s Customer & Growth area.