Analytic Consulting (Part 2) – Variables’ influence on retail sales – private labels

It is noteworthy that fewer and fewer consumers are cutting their spending but…A research we conducted in the third quarter revealed that still 67 percent of households changed their spending habits if compared with one year ago, in order to economise. One third of these families switched to cheaper groceries. Nielsen has put lots of effort into researching how changes in price, distribution, promotion and product selection influence retail sales. One of the important changes is that an ever-wider range of private label (PL) products is available in stores and consumers are buying more of these. Last year 24 percent of groceries, household chemicals and cosmetics sold in Hungary were PL products. In Europe this ratio is the highest, 45 percent in Switzerland. In the last December-May period Hungarian grocery retail sales grew 5 percent from the base period: PL sales increased 9 percent and manufacturer brand sales rose 4 percent. This elevated PL products’ share from sales to 27 percent (up 1 percentage point). Another ‘constantly changing’ factor is that retailers want to cut consumption prices or to keep them low due to the strong competition.