Belfast Telegraph

Thursday 24 April 2014

Northern Ireland shoppers switch to ‘own brand’ labels in bid to save cash

Shoppers in Northern Ireland are switching to supermarket own brands in search of bigger savings, it has emerged.

New data has revealed a leap in the number of consumers abandoning established names from 25% last August compared to 73% in April 2009.

Figures released by price comparison website uSwitch.com show a surge of 31m people buying supermarket own brands between this year and last.

Bargain hunters have also started to use money-off coupons, shop online and ditch treats, according to the research.

Speaking to the Belfast Telegraph, Dr Karise Hutchinson, a lecturer in retailing at the University of Ulster, said consumer patterns had shifted as a result of more restricted budgets.

“People are more savvy with their cash today than even a year ago,” she said.

“Now price comes first and there tends to be a lot more comparison of prices when it comes to the purchase-making decision process.

“Consumers will often know who is selling goods cheaper and quite often they will split a shop over different outlets as a result.”

Dr Hutchinson said the major retailers were well positioned to offer their customers bigger discounts than smaller outlets — but at a cost to the local economy.

“Supermarkets can offer discounted brands because they have the economies of scale associated with an international supply chain and can therefore offer products at very low prices,” she said.

“Consumers are responding well to that, but it’s having quite a disastrous effect on independents and there is a threat for our local Northern Ireland born and bred retailers.”

The trend towards own-brand labels is largely due to the big supermarkets, which have launched competitive ranges at the lower end of the market in a bid to attract customers.

Tesco launched a range of own brand items last year with names such as Country Barn, while Sainsbury’s suggested that consumers “switch and save” by purchasing own-brands.

Meanwhile, Asda has come under fire for its “round pound” campaign after it emerged that almost one in five £1 bargains are dearer than they were five months ago.

Trade magazine The Grocer said 173 out of 969 products in the promotion — which was launched at the start of the year promising 7,000 items at £1 or less — were more expensive in July than March. In its polling, uSwitch.com found that people were far more likely to employ money-saving tactics when they went food shopping this year than last year.

A staggering 74% use money-off coupons on their weekly shop compared with 26% in 2008, while one in five now compare prices at stores online before shopping — more than treble the number last year.

However, although own-brand goods can be substantially cheaper than premium brands, they are often nutritionally inferior because they use cheaper ingredients.

Despite the quality issue the uSwitch survey predicted that supermarkets will emerge from the recession in pole position, with share prices in Sainsbury’s and Tesco having recently experienced a rise.